# How do I clean up a chart of accounts that has too many accounts, duplicates, or accounts of the wrong type?

- **[not stated in the document · organizations generally]** The first step in improving a chart of accounts is a thorough review of the existing accounts to identify redundancies, inconsistencies and inactive items. → [CG-MCE-002#S001](#s-CG-MCE-002-S001)
- **[QuickBooks Online · not stated · QuickBooks Online users]** In QuickBooks Online, merging two chart-of-accounts accounts moves all past transactions of the duplicate into the account that is kept and sets the duplicate account to inactive. → [CG-MCE-002#S028](#s-CG-MCE-002-S028)
- **[QuickBooks Online · not stated · QuickBooks Online users]** A chart-of-accounts merge in QuickBooks Online is permanent and cannot be undone. → [CG-MCE-002#S029](#s-CG-MCE-002-S029)
- **[QuickBooks Online · QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus · United States · businesses using QuickBooks Online]** Making an account inactive in QuickBooks Online does not remove the transactions posted to it. → [CG-MCE-002#S021](#s-CG-MCE-002-S021)

## What this page establishes

- Reference: what merging, retiring, renaming and re-typing do in each platform — Partly established
- Reference: accounts the software owns, and the features that hold a reference to an account — Partly established
- Reference: consistency between periods and explaining a change in classification — Established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Reference: the record you have to leave behind — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: official platform documentation, primary regulator or government.)
- Reference: professional criteria for judging a chart of accounts — Partly established
- Survey first: sort every account into duplicate, unused, wrongly typed, over-granular or sound — Not established
- Capture the baseline before you touch anything — Not established (Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: official platform documentation.)
- The four instruments — merge, make inactive, rename, change type — and what each does to posted history — Not established
- What can be undone, and what cannot — Not established
- What changing an account's type does to your statements — Partly established (Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: high quality professional secondary reference, official platform documentation.)
- What the software will not let you do — Established
- Everything downstream that still points at the accounts you changed — Not established
- Prove the figures that had to stay the same did — Partly established (Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: official platform documentation, primary regulator or government.)
- Sequence the work so the file is never half-changed — Established
- Stop the chart from growing back — Partly established (Required authority: authoritative professional or accounting standard, high quality professional secondary reference. Highest achieved: high quality professional secondary reference, official platform documentation.)

## Survey first: sort every account into duplicate, unused, wrongly typed, over-granular or sound
<a id="need-CG-MCE-002-P1"></a>

- <a id="s-CG-MCE-002-S001"></a>The first step in improving a chart of accounts is a thorough review of the existing accounts to identify redundancies, inconsistencies and inactive items. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S001`
  > “The first step in improving a chart of accounts is to conduct a thorough review of existing accounts to identify redundancies, inconsistencies, and inactive items.” — [AccountingTools, Inc. — How to improve your chart of accounts](https://www.accountingtools.com/articles/reduce-the-chart-of-accounts), undated at census time (page footer: Copyright 2026); Chart of Accounts FAQs > What is the first step in improving a chart of accounts?. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S003"></a>Understanding how each account is currently used is what lets a structure be designed that better fits reporting and management needs. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S003`
  > “By understanding how each account is currently used, you can design a structure that better aligns with reporting and management needs.” — [AccountingTools, Inc. — How to improve your chart of accounts](https://www.accountingtools.com/articles/reduce-the-chart-of-accounts), undated at census time (page footer: Copyright 2026); Chart of Accounts FAQs > What is the first step in improving a chart of accounts?. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S004"></a>The account list should be reviewed periodically to find accounts holding relatively immaterial amounts. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S004`
  > “Periodically review the account list to see if any accounts contain relatively immaterial amounts.” — [AccountingTools, Inc. — Chart of accounts definition](https://www.accountingtools.com/articles/the-chart-of-accounts), undated at census time; AccountingTools re-dates articles on revision (page footer: Copyright 2026); Chart of Accounts Best Practices > Shut down accounts with immaterial balances. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S005"></a>An account with an immaterial balance whose information is not needed for special reports should be shut down and its stored information rolled into a larger account. _(jurisdiction: not stated in the document, entity_scope: organizations generally, conditions: balance is relatively immaterial; the information is not needed for special reports)_ `CG-MCE-002#S005`
  > “If so, and if this information is not needed for special reports, shut down these accounts and roll the stored information into a larger account.” — [AccountingTools, Inc. — Chart of accounts definition](https://www.accountingtools.com/articles/the-chart-of-accounts), undated at census time; AccountingTools re-dates articles on revision (page footer: Copyright 2026); Chart of Accounts Best Practices > Shut down accounts with immaterial balances. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S007"></a>Regular audits of the chart of accounts should be conducted to identify outdated or unused accounts. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S007`
  > “Periodically review and update . Conduct regular audits of the chart of accounts to identify outdated or unused accounts.” — [AccountingTools, Inc. — How to improve your chart of accounts](https://www.accountingtools.com/articles/reduce-the-chart-of-accounts), undated at census time (page footer: Copyright 2026); Other Ways to Optimize the Chart of Accounts > Periodically review and update. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S008"></a>Excessive detail can raise maintenance effort, create posting errors and complicate reporting without adding decision value. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S008`
  > “Excessive detail can increase maintenance effort, create posting errors, and complicate reporting without adding decision value.” — [AccountingTools, Inc. — Chart of accounts definition](https://www.accountingtools.com/articles/the-chart-of-accounts), undated at census time; AccountingTools re-dates articles on revision (page footer: Copyright 2026); FAQs > How granular should a chart of accounts be?. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S009"></a>An account type determines how QuickBooks tracks money for that account and which financial report - Balance Sheet or Profit & Loss - displays its data. _(jurisdiction: United States, entity_scope: QuickBooks Online company files (small business), platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Online Accountant, QuickBooks Ledger, Intuit Enterprise Suite, Intuit Accountant Suite)_ `CG-MCE-002#S009`
  > “Determine how QuickBooks tracks money and which financial reports (Balance Sheet or Profit & Loss) display the account data.” — [Intuit Inc. — Account type and detail types in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/learn-account-detail-types-chart-accounts/L2gCy0rfy_US_en_US), 2026-08-05; Overview > Account types. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S010"></a>In Sage 50, an account's type determines how the account is grouped in reports and financial statements and also controls what happens to the account during fiscal year-end. _(jurisdiction: US, entity_scope: businesses maintaining a chart of accounts in Sage 50, platform: Sage 50 (U.S.), platform_edition: 2026)_ `CG-MCE-002#S010`
  > “Account types define how the account will be grouped in reports and 
 financial statements. They also control what happens during fiscal year-end.” — [The Sage Group plc (Sage 50 U.S. product help) — Account Types (Maintain Chart of Accounts)](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/Chart_of_Accounts/Maintain_Chart_of_Accounts_Account_Types.htm), 2026-06-17; Account Types (Maintain Chart of Accounts) — introductory paragraph. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S011"></a>A successful merge in QuickBooks Online requires both accounts to have identical name, account type and detail type beforehand. _(jurisdiction: not stated, entity_scope: QuickBooks Online users, platform: QuickBooks Online)_ `CG-MCE-002#S011`
  > “Both accounts must have the exact same name, account type, and detail type before you can merge them successfully.” — [Intuit Inc. — Merge duplicate accounts in your chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-customers/merge-duplicate-accounts-customers-vendors-online/L5AOyW9kw_US_en_US), QuickBooks Online help article, continuously updated, as rendered at retrieval; Step 1: Identify the account you want to keep — opening sentence. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S012"></a>Intuit directs that the merge action be used only on accounts that were created by mistake. _(jurisdiction: not stated, entity_scope: QuickBooks Online users, platform: QuickBooks Online)_ `CG-MCE-002#S012`
  > “Only merge accounts created by mistake.” — [Intuit Inc. — Merge duplicate accounts in your chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-customers/merge-duplicate-accounts-customers-vendors-online/L5AOyW9kw_US_en_US), QuickBooks Online help article, continuously updated, as rendered at retrieval; Important callout, under the introductory paragraph. Verified 2026-09-08.

_Not established from an authoritative source._

## Capture the baseline before you touch anything
<a id="need-CG-MCE-002-P2"></a>

- <a id="s-CG-MCE-002-S014"></a>Intuit instructs the user to save the reconciliation reports of the account that will be merged away before beginning the merge. _(jurisdiction: not stated, entity_scope: QuickBooks Online users, platform: QuickBooks Online)_ `CG-MCE-002#S014`
  > “Save the reconciliation reports for the account you plan to merge before you start.” — [Intuit Inc. — Merge duplicate accounts in your chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-customers/merge-duplicate-accounts-customers-vendors-online/L5AOyW9kw_US_en_US), QuickBooks Online help article, continuously updated, as rendered at retrieval; Prerequisites — Reconciliation Reports. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S015"></a>After a merge the merged-away account loses its reconciliation history, while its transactions remain in the file and retain their reconciled status. _(jurisdiction: not stated, entity_scope: QuickBooks Online users, platform: QuickBooks Online)_ `CG-MCE-002#S015`
  > “That account loses its reconciliation history after the merge, but its transactions remain and stay reconciled.” — [Intuit Inc. — Merge duplicate accounts in your chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-customers/merge-duplicate-accounts-customers-vendors-online/L5AOyW9kw_US_en_US), QuickBooks Online help article, continuously updated, as rendered at retrieval; Prerequisites — Reconciliation Reports. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S016"></a>Good records are needed to prepare accurate financial statements, which include income (profit and loss) statements and balance sheets. _(jurisdiction: United States — federal tax (Internal Revenue Code), entity_scope: businesses / new business owners keeping records for federal tax purposes, effective_from: Publication 583 revised December 2024)_ `CG-MCE-002#S016`
  > “You need good records to prepare accurate financial statements. These include income (profit and loss) statements and balance sheets.” — [Internal Revenue Service — Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583), 2024-12; Recordkeeping — Why Keep Records? — Prepare your financial statements.. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S018"></a>The recordkeeping system should include a summary of business transactions, ordinarily made in the books (for example accounting journals and ledgers), and the books must show gross income as well as deductions and credits. _(jurisdiction: United States — federal tax (Internal Revenue Code), entity_scope: businesses / new business owners keeping records for federal tax purposes, effective_from: Publication 583 revised December 2024)_ `CG-MCE-002#S018`
  > “Your recordkeeping system should include a summary of your business transactions. This summary is ordinarily made in your books (for example, accounting journals and ledgers). Your books must show your gross income, as well as your deductions and credits.” — [Internal Revenue Service — Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583), 2024-12; Recordkeeping — Kinds of Records To Keep. Verified 2026-09-08.

_Not established from an authoritative source._

_Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: official platform documentation._

## The four instruments — merge, make inactive, rename, change type — and what each does to posted history
<a id="need-CG-MCE-002-P3"></a>

- See above: An account with an immaterial balance whose information is not needed for special reports should be shut down and its stored information rolled into a larger account. ([CG-MCE-002#S005](#s-CG-MCE-002-S005))

- See above: A successful merge in QuickBooks Online requires both accounts to have identical name, account type and detail type beforehand. ([CG-MCE-002#S011](#s-CG-MCE-002-S011))

- See above: Intuit directs that the merge action be used only on accounts that were created by mistake. ([CG-MCE-002#S012](#s-CG-MCE-002-S012))

- See above: Intuit instructs the user to save the reconciliation reports of the account that will be merged away before beginning the merge. ([CG-MCE-002#S014](#s-CG-MCE-002-S014))

- See above: After a merge the merged-away account loses its reconciliation history, while its transactions remain in the file and retain their reconciled status. ([CG-MCE-002#S015](#s-CG-MCE-002-S015))

- <a id="s-CG-MCE-002-S019"></a>QuickBooks Online instructs users to make accounts inactive instead of deleting them. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S019`
  > “Make accounts inactive instead of deleting them.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Article body, introduction. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S020"></a>In QuickBooks Online an account cannot be deleted; it can only be made inactive or merged with another account. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S020`
  > “You can’t delete an account, you can only make it inactive or merge it with another .” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about making accounts inactive. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S021"></a>Making an account inactive in QuickBooks Online does not remove the transactions posted to it. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S021`
  > “When you make accounts inactive, you won’t remove their transactions.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about making accounts inactive. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S022"></a>Before a balance sheet account is made inactive its balance should be zero; if it is not, QuickBooks Online creates an automatic adjustment entry to zero it out and adds it to the Opening Balance Equity account, which can affect balances and sales tax reports. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S022`
  > “Also, before you make a balance sheet account inactive, make sure its balance is zero. If not, QuickBooks Online creates an automatic adjustment entry to zero it out and adds it to the Opening Balance Equity account. This can affect balances and sales tax reports.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Make an account inactive — guidance before the steps. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S023"></a>If an account with a balance is made inactive, QuickBooks creates a journal entry moving the balance to another account, transactions stay on the financial reports, and reactivating the account does not move the balance back. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S023`
  > “If you make an account with a balance inactive, QuickBooks creates a journal entry . This moves the balance to another account. Your transactions stay on your financial reports. If you decide to reactivate the account, QuickBooks won't move the balance back.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about making accounts inactive. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S024"></a>A transaction related to an inactive account cannot be edited; the account must first be restored, the entry deleted from the register, and corrected to a zero balance before the account is made inactive again. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S024`
  > “You can't edit a transaction related to an inactive account. You must restore the account first to do so. Then, you need to go to the register and delete the entry. Afterwards, correct it to a zero balance before you make it inactive again.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about making accounts inactive. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S025"></a>Reactivating an account in QuickBooks Online does not bring back transactions or redo journal entries. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S025`
  > “Note : QuickBooks won't bring back transactions or redo journal entries after you make an account active again.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Make an account active again — Note. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S026"></a>Inactive accounts and their transactions still appear when reports are run in QuickBooks Online; reports can be customized to hide inactive accounts, but doing so may affect accuracy. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S026`
  > “Note : When you run reports, you’ll still see inactive accounts and their transactions. You can customize reports to hide inactive accounts, but this may affect accuracy.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; See inactive accounts — Note. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S028"></a>In QuickBooks Online, merging two chart-of-accounts accounts moves all past transactions of the duplicate into the account that is kept and sets the duplicate account to inactive. _(jurisdiction: not stated, entity_scope: QuickBooks Online users, platform: QuickBooks Online)_ `CG-MCE-002#S028`
  > “The merge moves all past transactions into the account you keep and makes the duplicate account inactive.” — [Intuit Inc. — Merge duplicate accounts in your chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-customers/merge-duplicate-accounts-customers-vendors-online/L5AOyW9kw_US_en_US), QuickBooks Online help article, continuously updated, as rendered at retrieval; Introductory paragraph, under the article title. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S029"></a>A chart-of-accounts merge in QuickBooks Online is permanent and cannot be undone. _(jurisdiction: not stated, entity_scope: QuickBooks Online users, platform: QuickBooks Online)_ `CG-MCE-002#S029`
  > “Merging is permanent and can't be undone.” — [Intuit Inc. — Merge duplicate accounts in your chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-customers/merge-duplicate-accounts-customers-vendors-online/L5AOyW9kw_US_en_US), QuickBooks Online help article, continuously updated, as rendered at retrieval; Important callout, under the introductory paragraph. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S031"></a>When merging a subaccount into a parent account, the Account Type must be changed to match the parent account. _(jurisdiction: not stated, entity_scope: QuickBooks Online users, platform: QuickBooks Online, conditions: merging a subaccount and a parent account)_ `CG-MCE-002#S031`
  > “If you're merging a subaccount and a parent account, change the **Account Type** to match the parent account.” — [Intuit Inc. — Merge duplicate accounts in your chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-customers/merge-duplicate-accounts-customers-vendors-online/L5AOyW9kw_US_en_US), QuickBooks Online help article, continuously updated, as rendered at retrieval; Step 2: Merge the duplicate account — item 3, first sub-bullet. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S034"></a>Where both account registers carry an opening balance equity transaction, Intuit instructs the user to delete the more recent of the two before merging. _(jurisdiction: not stated, entity_scope: QuickBooks Online users, platform: QuickBooks Online, conditions: both registers have an opening balance equity transaction)_ `CG-MCE-002#S034`
  > “If both registers have an opening balance equity transaction, delete the most recent one before you merge.” — [Intuit Inc. — Merge duplicate accounts in your chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-customers/merge-duplicate-accounts-customers-vendors-online/L5AOyW9kw_US_en_US), QuickBooks Online help article, continuously updated, as rendered at retrieval; Prerequisites — Opening Balances. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S037"></a>Marking an account inactive is reversible: the same steps with Mark as Active restore the account to active. _(jurisdiction: not stated in the document, entity_scope: Zoho Books organizations (businesses using Zoho Books), platform: Zoho Books)_ `CG-MCE-002#S037`
  > “Note: To mark an account as active again, follow the same steps as above, and click Mark as Active from the dropdown.” — [Zoho Corporation — Chart of Accounts | Help | Zoho Books](https://www.zoho.com/us/books/help/accountant/chart-of-accounts.html), no last-updated date published on the page (retrieved 2026-09-08); Other Actions in Chart of Accounts — Mark an Account as Inactive (Note). Verified 2026-09-08.

- <a id="s-CG-MCE-002-S038"></a>An account associated with any transactions cannot be deleted; the transactions must first be updated to use another account or deleted individually. _(jurisdiction: not stated in the document, entity_scope: Zoho Books organizations (businesses using Zoho Books), platform: Zoho Books)_ `CG-MCE-002#S038`
  > “Prerequisite: You cannot delete an account if it’s associated with any transactions in Zoho Books. Either update the transactions to use another account or delete the transactions individually before you proceed with the deletion.” — [Zoho Corporation — Chart of Accounts | Help | Zoho Books](https://www.zoho.com/us/books/help/accountant/chart-of-accounts.html), no last-updated date published on the page (retrieved 2026-09-08); Other Actions in Chart of Accounts — Delete an Account (Prerequisite). Verified 2026-09-08.

- <a id="s-CG-MCE-002-S039"></a>The account type of Zoho Books' default accounts cannot be changed, and those accounts cannot be marked inactive. _(jurisdiction: not stated in the document, entity_scope: Zoho Books organizations (businesses using Zoho Books), platform: Zoho Books)_ `CG-MCE-002#S039`
  > “Note: You will not be able to change the account type of the default accounts of Zoho Books or mark them as inactive.” — [Zoho Corporation (Zoho Books FAQ) — Change Account Type of an Account | FAQ | Zoho Books](https://www.zoho.com/us/books/kb/accountant/change-account-type-of-account.html), no last-updated date published on the page (retrieved 2026-09-08); FAQ: How do I change the account type associated with an account? — opening Note. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S040"></a>An account's type cannot be changed once transactions have been created using it; the stated alternative is to mark that account inactive, create a new account and associate the transactions with the new account. _(jurisdiction: not stated in the document, entity_scope: Zoho Books organizations (businesses using Zoho Books), platform: Zoho Books)_ `CG-MCE-002#S040`
  > “You will not be able to change the account type associated with an account if you have created transactions using the account. However, you can mark the account as inactive, create a new account, and associate transactions with this account.” — [Zoho Corporation (Zoho Books FAQ) — Change Account Type of an Account | FAQ | Zoho Books](https://www.zoho.com/us/books/kb/accountant/change-account-type-of-account.html), no last-updated date published on the page (retrieved 2026-09-08); FAQ — after the change-account-type steps. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S041"></a>Accounts Receivable, Accounts Payable, Unearned Revenue, Retained Earnings, Fixed accounts, Inventory Tracked accounts and Bank accounts are not listed in the Bulk Update account dropdown. _(jurisdiction: not stated in the document, entity_scope: Zoho Books organizations (businesses using Zoho Books), platform: Zoho Books)_ `CG-MCE-002#S041`
  > “The following accounts will not be listed in the dropdown:
 Accounts Receivable
 Accounts Payable
 Unearned Revenue
 Retained Earnings
 Fixed accounts
 Inventory Tracked accounts
 Bank accounts” — [Zoho Corporation (Zoho Books FAQ) — Change Account Type of an Account | FAQ | Zoho Books](https://www.zoho.com/us/books/kb/accountant/change-account-type-of-account.html), no last-updated date published on the page (retrieved 2026-09-08); FAQ — To update the new account in the existing transactions (list following 'Click Search'). Verified 2026-09-08.

- <a id="s-CG-MCE-002-S043"></a>Archiving a Wave account leaves transactions already posted to that account unchanged. _(jurisdiction: not stated, entity_scope: Users of Wave accounting software, platform: Wave, conditions: Chart of Accounts page is only available on the web version of Wave)_ `CG-MCE-002#S043`
  > “Archiving an account does not affect existing transactions.” — [Wave Financial Inc. (Wave Help Center) — Archive or restore an account in your chart of accounts](https://support.waveapps.com/hc/en-us/articles/35620458891924-Archive-or-restore-an-account-in-your-chart-of-accounts), 2026-04-22; Introduction paragraph. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S044"></a>An archived Wave account continues to appear on reports for periods in which transactions exist, but new transactions can no longer be categorized to it. _(jurisdiction: not stated, entity_scope: Users of Wave accounting software, platform: Wave, conditions: Chart of Accounts page is only available on the web version of Wave)_ `CG-MCE-002#S044`
  > “You will still see the archived account on reports in periods where transactions exist, however, you won't be able to categorize new transactions to the account.” — [Wave Financial Inc. (Wave Help Center) — Archive or restore an account in your chart of accounts](https://support.waveapps.com/hc/en-us/articles/35620458891924-Archive-or-restore-an-account-in-your-chart-of-accounts), 2026-04-22; Introduction paragraph. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S045"></a>Archiving is reversible in Wave: restoring an archived account makes it available for categorizing transactions again. _(jurisdiction: not stated, entity_scope: Users of Wave accounting software, platform: Wave, conditions: Chart of Accounts page is only available on the web version of Wave)_ `CG-MCE-002#S045`
  > “When you restore an archived account, you can categorize transactions to it again.” — [Wave Financial Inc. (Wave Help Center) — Archive or restore an account in your chart of accounts](https://support.waveapps.com/hc/en-us/articles/35620458891924-Archive-or-restore-an-account-in-your-chart-of-accounts), 2026-04-22; Section 'Restore an account'. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S046"></a>For some accounts that have been created in Wave, the account type and the currency cannot be edited. _(jurisdiction: not stated, entity_scope: Users of Wave accounting software, platform: Wave, conditions: Chart of Accounts page is only available on the web version of Wave)_ `CG-MCE-002#S046`
  > “For some created accounts, it’s not possible to edit the account type or currency.” — [Wave Financial Inc. (Wave Help Center) — Edit an account in your chart of accounts](https://support.waveapps.com/hc/en-us/articles/35620716744340-Edit-an-account-in-your-chart-of-accounts), 2026-07-22; Second paragraph. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S048"></a>Wave's stated remedy when an account was created under the wrong type and its type cannot be changed is to create a new account under the correct type. _(jurisdiction: not stated, entity_scope: Users of Wave accounting software, platform: Wave, conditions: Chart of Accounts page is only available on the web version of Wave)_ `CG-MCE-002#S048`
  > “If you accidentally create an account under the wrong type and cannot change it, create a new account under the correct type.” — [Wave Financial Inc. (Wave Help Center) — Edit an account in your chart of accounts](https://support.waveapps.com/hc/en-us/articles/35620716744340-Edit-an-account-in-your-chart-of-accounts), 2026-07-22; Third paragraph. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S049"></a>Where applicable, transactions are to be moved from the wrongly typed Wave account to the newly created correct account. _(jurisdiction: not stated, entity_scope: Users of Wave accounting software, platform: Wave, conditions: Chart of Accounts page is only available on the web version of Wave; an account was created under the wrong type and its type cannot be changed)_ `CG-MCE-002#S049`
  > “Move any transactions over, if applicable.” — [Wave Financial Inc. (Wave Help Center) — Edit an account in your chart of accounts](https://support.waveapps.com/hc/en-us/articles/35620716744340-Edit-an-account-in-your-chart-of-accounts), 2026-07-22; Third paragraph. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S050"></a>Wave's account edit form updates the account details, and the account ID and description fields are viewed and edited through an 'Edit account ID and description' control. _(jurisdiction: not stated, entity_scope: Users of Wave accounting software, platform: Wave, conditions: Chart of Accounts page is only available on the web version of Wave)_ `CG-MCE-002#S050`
  > “Update the account details. Click Edit account ID and description to view and edit these fields.” — [Wave Financial Inc. (Wave Help Center) — Edit an account in your chart of accounts](https://support.waveapps.com/hc/en-us/articles/35620716744340-Edit-an-account-in-your-chart-of-accounts), 2026-07-22; 'To edit an account' step list, step 4. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S051"></a>Once an account ID has been entered and saved, that ID cannot be changed or edited, though the account description can be changed. _(jurisdiction: US, entity_scope: businesses maintaining a chart of accounts in Sage 50, platform: Sage 50 (U.S.), platform_edition: 2026)_ `CG-MCE-002#S051`
  > “Once you enter an ID and click Save , you can't change or edit the ID, however, you can change the description.” — [The Sage Group plc (Sage 50 U.S. product help) — Maintain Chart of Accounts](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/Chart_of_Accounts/Maintain_Chart_of_Accounts.htm), 2026-06-17; Maintain Chart of Accounts — 'Account ID' field help. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S052"></a>An account no longer planned to be used may be made inactive; attempting to use an inactive account produces a warning that the account is inactive and asks whether to continue. _(jurisdiction: US, entity_scope: businesses maintaining a chart of accounts in Sage 50, platform: Sage 50 (U.S.), platform_edition: 2026)_ `CG-MCE-002#S052`
  > “If you no longer plan to use an account, you might want to make the 
 account inactive. If you try to use an inactive account, a warning tells 
 you that the account is inactive and asks if you want to continue.” — [The Sage Group plc (Sage 50 U.S. product help) — Maintain Chart of Accounts](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/Chart_of_Accounts/Maintain_Chart_of_Accounts.htm), 2026-06-17; Maintain Chart of Accounts — 'Inactive' field help. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S053"></a>When the user chooses to Purge after closing the fiscal year, all accounts that have no outstanding transactions are eligible for purging. _(jurisdiction: US, entity_scope: businesses maintaining a chart of accounts in Sage 50, platform: Sage 50 (U.S.), platform_edition: 2026)_ `CG-MCE-002#S053`
  > “When you choose to Purge 
 after closing the fiscal year, all accounts that have no outstanding transactions 
 are eligible for purging.” — [The Sage Group plc (Sage 50 U.S. product help) — Maintain Chart of Accounts](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/Chart_of_Accounts/Maintain_Chart_of_Accounts.htm), 2026-06-17; Maintain Chart of Accounts — 'Inactive' field help, 'Important!'. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S054"></a>When an account ID is changed in Sage 50, all data records and transactions associated with that account — both current and past transactions — reflect the new ID. _(jurisdiction: US, entity_scope: businesses maintaining a chart of accounts in Sage 50, platform: Sage 50 (U.S.), platform_edition: 2026)_ `CG-MCE-002#S054`
  > “When you change an account ID, all data records and transactions associated 
 with this account will reflect the new ID. This includes both current 
 and past transactions.” — [The Sage Group plc (Sage 50 U.S. product help) — Change an Account ID](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/Chart_of_Accounts/Change_an_Account_ID.htm), 2026-06-17; Change an Account ID — closing paragraph. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S055"></a>Sage 50 permits the Account Type of an existing account that has balances and transactions applied to it to be changed, but strongly recommends against doing so because the change will change the company's financial statements. _(jurisdiction: US, entity_scope: businesses maintaining a chart of accounts in Sage 50, platform: Sage 50 (U.S.), platform_edition: 2026)_ `CG-MCE-002#S055`
  > “Although Sage 50 will allow you to change the Account Type of an existing account with balances and transactions on which it is applied, we HIGHLY recommend that you do not change it. This WILL change your financial statements!” — [The Sage Group plc (Sage 50 U.S. product help) — Account Types (Maintain Chart of Accounts)](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/Chart_of_Accounts/Maintain_Chart_of_Accounts_Account_Types.htm), 2026-06-17; Account Types — 'Warning!' (closing warning). Verified 2026-09-08.

- <a id="s-CG-MCE-002-S056"></a>QuickBooks Online permits the account type of an existing parent account or subaccount to be changed after the account exists. _(jurisdiction: United States (en-US QuickBooks help site), entity_scope: QuickBooks Online company files / users of the company file, platform: QuickBooks Online)_ `CG-MCE-002#S056`
  > “"Learn how to change the account type of an existing parent account or subaccount in QuickBooks Online."” — [Intuit Inc. — Change the account type of an existing parent account or subaccount](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/change-type-existing-parent-account-subaccount/L5JBGRJkR_US_en_US), 2026-08-04; Introduction. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S074"></a>An account used by products or services cannot be made inactive until the products and services are relinked to a different account or made inactive themselves. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S074`
  > “If products or services use the account, you can’t make them inactive. To do so, you can either:
 Change the account they're linked to .
 Make the products and services inactive.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about accounts that you can’t make inactive — Accounts that use products or services. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S079"></a>Intuit instructs users not to merge accounts that are connected to online banking, nor accounts that QuickBooks itself creates, of which the direct deposit funding account is given as an example. _(jurisdiction: not stated, entity_scope: QuickBooks Online users, platform: QuickBooks Online, conditions: account is connected to online banking; account was created by QuickBooks)_ `CG-MCE-002#S079`
  > “Don't merge accounts connected to online banking or accounts QuickBooks creates, such as the direct deposit funding account.” — [Intuit Inc. — Merge duplicate accounts in your chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/manage-customers/merge-duplicate-accounts-customers-vendors-online/L5AOyW9kw_US_en_US), QuickBooks Online help article, continuously updated, as rendered at retrieval; Prerequisites — Online Banking. Verified 2026-09-08.

_Not established from an authoritative source._

## What can be undone, and what cannot
<a id="need-CG-MCE-002-P4"></a>

- See above: Intuit directs that the merge action be used only on accounts that were created by mistake. ([CG-MCE-002#S012](#s-CG-MCE-002-S012))

- See above: Intuit instructs the user to save the reconciliation reports of the account that will be merged away before beginning the merge. ([CG-MCE-002#S014](#s-CG-MCE-002-S014))

- See above: After a merge the merged-away account loses its reconciliation history, while its transactions remain in the file and retain their reconciled status. ([CG-MCE-002#S015](#s-CG-MCE-002-S015))

- See above: If an account with a balance is made inactive, QuickBooks creates a journal entry moving the balance to another account, transactions stay on the financial reports, and reactivating the account does not move the balance back. ([CG-MCE-002#S023](#s-CG-MCE-002-S023))

- See above: A transaction related to an inactive account cannot be edited; the account must first be restored, the entry deleted from the register, and corrected to a zero balance before the account is made inactive again. ([CG-MCE-002#S024](#s-CG-MCE-002-S024))

- See above: Reactivating an account in QuickBooks Online does not bring back transactions or redo journal entries. ([CG-MCE-002#S025](#s-CG-MCE-002-S025))

- <a id="s-CG-MCE-002-S027"></a>QuickBooks Online tells the user to consult their accountant before making an account inactive, to confirm the change is right for them. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S027`
  > “Note : Before you start, reach out to your accountant. Make sure this change is right for you.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Make an account inactive — Note. Verified 2026-09-08.

- See above: A chart-of-accounts merge in QuickBooks Online is permanent and cannot be undone. ([CG-MCE-002#S029](#s-CG-MCE-002-S029))

- See above: Marking an account inactive is reversible: the same steps with Mark as Active restore the account to active. ([CG-MCE-002#S037](#s-CG-MCE-002-S037))

- See above: Archiving is reversible in Wave: restoring an archived account makes it available for categorizing transactions again. ([CG-MCE-002#S045](#s-CG-MCE-002-S045))

- See above: When an account ID is changed in Sage 50, all data records and transactions associated with that account — both current and past transactions — reflect the new ID. ([CG-MCE-002#S054](#s-CG-MCE-002-S054))

- <a id="s-CG-MCE-002-S059"></a>Once every account in the group carries the same account type, the accounts can be edited back into subaccounts and re-linked to the parent account — the detachment performed to change the type is reversible. _(jurisdiction: United States (en-US QuickBooks help site), entity_scope: QuickBooks Online company files / users of the company file, platform: QuickBooks Online)_ `CG-MCE-002#S059`
  > “"Once all of the accounts reflect the same account type, you can edit the subaccounts to identify them as subaccounts again, and link them back to the parent account."” — [Intuit Inc. — Change the account type of an existing parent account or subaccount](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/change-type-existing-parent-account-subaccount/L5JBGRJkR_US_en_US), 2026-08-04; Section: Return accounts to subaccount status. Verified 2026-09-08.

_Not established from an authoritative source._

## What changing an account's type does to your statements
<a id="need-CG-MCE-002-P5"></a>

- See above: An account type determines how QuickBooks tracks money for that account and which financial report - Balance Sheet or Profit & Loss - displays its data. ([CG-MCE-002#S009](#s-CG-MCE-002-S009))

- See above: In Sage 50, an account's type determines how the account is grouped in reports and financial statements and also controls what happens to the account during fiscal year-end. ([CG-MCE-002#S010](#s-CG-MCE-002-S010))

- See above: An account's type cannot be changed once transactions have been created using it; the stated alternative is to mark that account inactive, create a new account and associate the transactions with the new account. ([CG-MCE-002#S040](#s-CG-MCE-002-S040))

- See above: Sage 50 permits the Account Type of an existing account that has balances and transactions applied to it to be changed, but strongly recommends against doing so because the change will change the company's financial statements. ([CG-MCE-002#S055](#s-CG-MCE-002-S055))

- See above: QuickBooks Online permits the account type of an existing parent account or subaccount to be changed after the account exists. ([CG-MCE-002#S056](#s-CG-MCE-002-S056))

- <a id="s-CG-MCE-002-S110"></a>Information about a reporting entity is more useful when it can be compared with similar information about other entities and with similar information about the same entity for another period or date. _(jurisdiction: United States, entity_scope: reporting entities providing general purpose financial reports (FASB conceptual framework; Concepts Statements are not part of the FASB Accounting Standards Codification))_ `CG-MCE-002#S110`
  > “Consequently, information about a reporting entity is more useful if it can be
compared with similar information about other entities and with similar
information about the same entity for another period or another date.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 3, Qualitative Characteristics of Useful Financial Information](https://storage.fasb.org/Concepts_Statement_No_8_Chapter_3_As_Issued.pdf), 2010-09; Chapter 3, Comparability, paragraph QC20. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S111"></a>A single economic phenomenon can be faithfully represented in more than one way, but permitting alternative accounting methods for the same phenomenon diminishes comparability. _(jurisdiction: United States, entity_scope: reporting entities providing general purpose financial reports (FASB conceptual framework; Concepts Statements are not part of the FASB Accounting Standards Codification))_ `CG-MCE-002#S111`
  > “Although a single economic phenomenon can be faithfully
represented in multiple ways, permitting alternative accounting methods for the
same economic phenomenon diminishes comparability.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 3, Qualitative Characteristics of Useful Financial Information](https://storage.fasb.org/Concepts_Statement_No_8_Chapter_3_As_Issued.pdf), 2010-09; Chapter 3, Comparability, paragraph QC25. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S112"></a>One enhancing characteristic may have to be diminished to maximise another; a temporary reduction in comparability from prospectively applying a new financial reporting standard may be worthwhile for longer-term relevance or faithful representation, and appropriate disclosures may partially compensate for the resulting noncomparability. _(jurisdiction: United States, entity_scope: reporting entities providing general purpose financial reports (FASB conceptual framework; Concepts Statements are not part of the FASB Accounting Standards Codification))_ `CG-MCE-002#S112`
  > “Sometimes, one enhancing
qualitative characteristic may have to be diminished to maximize another
qualitative characteristic. For example, a temporary reduction in comparability as
a result of prospectively applying a new financial reporting standard may be
worthwhile to improve relevance or faithful representation in the longer term.
Appropriate disclosures may partially compensate for noncomparability.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 3, Qualitative Characteristics of Useful Financial Information](https://storage.fasb.org/Concepts_Statement_No_8_Chapter_3_As_Issued.pdf), 2010-09; Chapter 3, Applying the Enhancing Qualitative Characteristics, paragraph QC34. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S113"></a>For some items a complete depiction may also require explanation of significant facts about the items' quality and nature and of the process used to determine the numerical depiction. _(jurisdiction: United States, entity_scope: reporting entities providing general purpose financial reports (FASB conceptual framework; Concepts Statements are not part of the FASB Accounting Standards Codification))_ `CG-MCE-002#S113`
  > “For some items, a complete depiction also may entail explanations of
significant facts about the quality and nature of the items, factors and
circumstances that might affect their quality and nature, and the process used to
determine the numerical depiction.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 3, Qualitative Characteristics of Useful Financial Information](https://storage.fasb.org/Concepts_Statement_No_8_Chapter_3_As_Issued.pdf), 2010-09; Chapter 3, Faithful Representation, paragraph QC13. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S114"></a>Relevant, faithfully represented information is most useful when readily comparable with information from other entities and from the same entity in other periods, and increasing that comparability is one of the most important reasons financial reporting standards exist. _(jurisdiction: United States, entity_scope: reporting entities providing general purpose financial reports (FASB conceptual framework; Concepts Statements are not part of the FASB Accounting Standards Codification))_ `CG-MCE-002#S114`
  > “Relevant and faithfully represented information is most useful if it can
be readily compared with similar information reported by other entities and by the
same entity in other periods. One of the most important reasons that financial
reporting standards are needed is to increase the comparability of reported
financial information.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 3, Qualitative Characteristics of Useful Financial Information](https://storage.fasb.org/Concepts_Statement_No_8_Chapter_3_As_Issued.pdf), 2010-09; Appendix: Basis for Conclusions, Comparability, paragraph BC3.33. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S117"></a>Financial statements may be prepared on a comparative basis and comparative information is normally meaningful, but this may not be the case in some circumstances, such as when the financial structure of an entity has significantly changed or when a comprehensive revaluation of assets and liabilities has been made. _(jurisdiction: United States, entity_scope: small- and medium-sized entities that elect to use the AICPA FRF for SMEs accounting framework, accounting_basis: FRF for SMEs accounting framework (AICPA special purpose framework; not accounting principles generally accepted in the United States of America), conditions: use of the framework is optional; the document states it has no official or authoritative status)_ `CG-MCE-002#S117`
  > “Financial statements may be prepared on a comparative basis.
Comparative information is normally meaningful. However, this may not
be the case in some circumstances, such as when the financial structure
of an entity has significantly changed or when a comprehensive revalua-
tion of assets and liabilities has been made in accordance with chapter 29,
“New Basis (Push-Down) Accounting.”” — [American Institute of Certified Public Accountants (AICPA) — Financial Reporting Framework for Small- and Medium-Sized Entities](https://assets.ctfassets.net/rb9cdnjh59cm/3JxMgvNdsMPIRKA8A3GbS7/eb06b7b4fb1a8b028cf8375ff3c4eeda/frf-smes-framework.pdf), November 2017; Chapter 2, paragraph 2.16. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S118"></a>A change in the classification of an item between periods, resulting from a change in the allocation or grouping of items within or among relevant categories, is a matter of presentation and is not in itself a change in accounting policy; but to enhance comparability with the current period the item should be reclassified in the prior period's financial statements to conform with the new presentation. _(jurisdiction: United States, entity_scope: small- and medium-sized entities that elect to use the AICPA FRF for SMEs accounting framework, accounting_basis: FRF for SMEs accounting framework (AICPA special purpose framework; not accounting principles generally accepted in the United States of America), conditions: use of the framework is optional; the document states it has no official or authoritative status)_ `CG-MCE-002#S118`
  > “The classification of an item in the financial statements of the
current period may be different from its classification in the financial
statements of prior periods as a result of a change in the allocation or
grouping of items within or among relevant categories. Such a change in
classification is a matter of presentation and is not, in itself, a change
in an accounting policy. However, to enhance comparability with the fi-
nancial statements of the current period, the item should be reclassified
in the financial statements of the prior period to conform with the new
presentation.” — [American Institute of Certified Public Accountants (AICPA) — Financial Reporting Framework for Small- and Medium-Sized Entities](https://assets.ctfassets.net/rb9cdnjh59cm/3JxMgvNdsMPIRKA8A3GbS7/eb06b7b4fb1a8b028cf8375ff3c4eeda/frf-smes-framework.pdf), November 2017; Chapter 2, paragraph 2.17. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S119"></a>Details about reclassifications of financial statement items made to conform to the present year's presentation should be disclosed. _(jurisdiction: United States, entity_scope: small- and medium-sized entities that elect to use the AICPA FRF for SMEs accounting framework, accounting_basis: FRF for SMEs accounting framework (AICPA special purpose framework; not accounting principles generally accepted in the United States of America), conditions: use of the framework is optional; the document states it has no official or authoritative status)_ `CG-MCE-002#S119`
  > “Details about reclassifications of financial statement items to
 conform to the present year’s presentation, as described in paragraph 2.17,
 should be disclosed.” — [American Institute of Certified Public Accountants (AICPA) — Financial Reporting Framework for Small- and Medium-Sized Entities](https://assets.ctfassets.net/rb9cdnjh59cm/3JxMgvNdsMPIRKA8A3GbS7/eb06b7b4fb1a8b028cf8375ff3c4eeda/frf-smes-framework.pdf), November 2017; Chapter 2, paragraph 2.22. Verified 2026-09-08.

_Partly established. Established: what changing an account's type does to comparability with statements that were already issued from the old structure (S118). Missing: what changing an account's type does to where its balance is reported._

_Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: high quality professional secondary reference, official platform documentation._

## What the software will not let you do
<a id="need-CG-MCE-002-P6"></a>

- See above: When merging a subaccount into a parent account, the Account Type must be changed to match the parent account. ([CG-MCE-002#S031](#s-CG-MCE-002-S031))

- See above: An account associated with any transactions cannot be deleted; the transactions must first be updated to use another account or deleted individually. ([CG-MCE-002#S038](#s-CG-MCE-002-S038))

- See above: The account type of Zoho Books' default accounts cannot be changed, and those accounts cannot be marked inactive. ([CG-MCE-002#S039](#s-CG-MCE-002-S039))

- See above: An account's type cannot be changed once transactions have been created using it; the stated alternative is to mark that account inactive, create a new account and associate the transactions with the new account. ([CG-MCE-002#S040](#s-CG-MCE-002-S040))

- See above: Accounts Receivable, Accounts Payable, Unearned Revenue, Retained Earnings, Fixed accounts, Inventory Tracked accounts and Bank accounts are not listed in the Bulk Update account dropdown. ([CG-MCE-002#S041](#s-CG-MCE-002-S041))

- See above: For some accounts that have been created in Wave, the account type and the currency cannot be edited. ([CG-MCE-002#S046](#s-CG-MCE-002-S046))

- See above: Once an account ID has been entered and saved, that ID cannot be changed or edited, though the account description can be changed. ([CG-MCE-002#S051](#s-CG-MCE-002-S051))

- See above: When the user chooses to Purge after closing the fiscal year, all accounts that have no outstanding transactions are eligible for purging. ([CG-MCE-002#S053](#s-CG-MCE-002-S053))

- <a id="s-CG-MCE-002-S057"></a>In the QuickBooks Online Chart of Accounts a parent account and all of its subaccounts must share the same account type; to change the type of such a group, each subaccount is first detached to become a parent account, its type edited, then the parent account's type changed, and the accounts re-added under the parent. _(jurisdiction: United States (en-US QuickBooks help site), entity_scope: QuickBooks Online Chart of Accounts — parent accounts and subaccounts, platform: QuickBooks Online)_ `CG-MCE-002#S057`
  > “"In the Chart of Accounts, all parent accounts and their subaccounts must have the same account type. To change the account type for a group of accounts, begin by changing each subaccount to a parent account so you can edit their account type. Then, change the parent account's type, and add all the other accounts back under the parent account."” — [Intuit Inc. — Change the account type of an existing parent account or subaccount](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/change-type-existing-parent-account-subaccount/L5JBGRJkR_US_en_US), 2026-08-04; Introduction. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S058"></a>Every subaccount in the group must be converted and re-typed before the parent account's own account type is changed. _(jurisdiction: United States (en-US QuickBooks help site), entity_scope: QuickBooks Online company files / users of the company file, platform: QuickBooks Online)_ `CG-MCE-002#S058`
  > “"Repeat these steps for the remaining subaccounts, and then change the account type of the parent account."” — [Intuit Inc. — Change the account type of an existing parent account or subaccount](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/change-type-existing-parent-account-subaccount/L5JBGRJkR_US_en_US), 2026-08-04; Section: Change account types. Verified 2026-09-08.

- See above: Once every account in the group carries the same account type, the accounts can be edited back into subaccounts and re-linked to the parent account — the detachment performed to change the type is reversible. ([CG-MCE-002#S059](#s-CG-MCE-002-S059))

- <a id="s-CG-MCE-002-S060"></a>To be re-linked as a subaccount, an account must be set to the account type of its parent account. _(jurisdiction: United States (en-US QuickBooks help site), entity_scope: QuickBooks Online company files / users of the company file, platform: QuickBooks Online)_ `CG-MCE-002#S060`
  > “4. Select the Account type dropdown, then select the account type of the parent account” — [Intuit Inc. — Change the account type of an existing parent account or subaccount](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/change-type-existing-parent-account-subaccount/L5JBGRJkR_US_en_US), 2026-08-04; Section: Return accounts to subaccount status > Steps, step 4. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S061"></a>QuickBooks Online creates specific default accounts in the chart of accounts when a company is created, determined by the business entity selected, and creates other special accounts when certain actions are taken or features are turned on in settings. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S061`
  > “When you create your company in QuickBooks Online, specific default accounts in your chart of accounts are created for you depending on the business entity you selected. Other special accounts are created when certain actions are taken or features are turned on in your QuickBookssettings.” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Article body, introduction. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S062"></a>Some of the default accounts QuickBooks Online creates cannot be changed. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S062`
  > “In the chart of accounts, it’s important to understand that some of these default accounts can’t be changed.” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Article body, introduction. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S063"></a>The listed default accounts are created when QuickBooks is set up or when an event such as turning on the sales tax setting triggers them, and they cannot be made inactive or used for any other purpose. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S063`
  > “The following default accounts are created when you set up QuickBooks, or when an event triggers them, like turning on the sales tax setting. You can’t make these accounts inactive or use them for any other purpose.” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Accounts that can’t be deactivated. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S064"></a>Opening Balance Equity is QuickBooks Online's default account for adjustments, and only its name may be edited; it is listed among accounts that cannot be made inactive or used for any other purpose. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S064`
  > “Opening Balance Equity : This is the default account for adjustments. You can only edit the name of this account, if necessary.” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Accounts that can’t be deactivated — Opening Balance Equity. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S065"></a>The Retained Earnings account reports the company's net income on the Balance Sheet report; its name can be edited but editing it is not recommended because the term is a common accounting term used in the Balance Sheet. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S065`
  > “Retained Earnings : This account reports the net income of your company on the Balance Sheet report. You can edit the name of the Retained Earnings account but because it’s a common accounting term and used in the Balance Sheet, it’s not recommended.” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Accounts that can’t be deactivated — Retained Earnings. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S066"></a>If the Inventory/Stock Asset or Cost of Goods Sold/Cost of Sales accounts are edited or deactivated, any edits to Products/Services will be recreated. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S066`
  > “Inventory/Stock Asset and Cost of Goods Sold/Cost of Sales : If you try to edit or deactivate these accounts, any edits to your Products/Services will be recreated.” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Accounts that can’t be deactivated — Inventory/Stock Asset and Cost of Goods Sold/Cost of Sales. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S067"></a>Sales of Product Income is the default account QuickBooks Online creates to track sales for inventory items and should not be deleted or renamed; if it is deleted or renamed, QuickBooks Online will create a new account to take its place. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S067`
  > “Sales of Product Income : This is used to track sales for inventory items. This account is the default account created to track sales for inventory items, and should not be deleted, or renamed. If deleted or renamed, QuickBooks Online will create a new account to take its place.” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Accounts that can’t be deactivated — Sales of Product Income. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S068"></a>QuickBooks Online creates a '(Sales tax agency name) Payable' account when sales tax is set up for a tax agency, and that account then reports the sales tax for every transaction. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S068`
  > “(Sales tax agency name) Payable : This account is created if you set up sales tax for a tax agency. Then it reports the sales tax for every transaction.” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Accounts that can’t be deactivated — (Sales tax agency name) Payable. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S069"></a>Uncategorized Expense and Uncategorized Income are created automatically by QuickBooks Online and track money the business earned or spends that still needs to be categorized; they are listed as accounts that can be edited but not deactivated or merged. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S069`
  > “Uncategorized Expense and Uncategorized Income : These accounts are created automatically and track money your business earned or spends that still needs to be categorized.” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Accounts that can be edited, but not deactivated or merged — Uncategorized Expense and Uncategorized Income. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S070"></a>Billable Expense Income and Markup can only be deleted by merging them with the Services income account. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S070`
  > “If you have the following accounts, you can only delete them by merging them with the Services income account:” — [Intuit Inc. — Manage default and special accounts in your QuickBooks Online chart of accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/manage-default-special-accounts-chart-accounts/L3WvLaIfa_US_en_US), 2026-08-03; Accounts that can be deleted by merging. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S071"></a>Only manually created accounts can be marked inactive; Zoho Books' default accounts cannot be marked as inactive. _(jurisdiction: not stated in the document, entity_scope: Zoho Books organizations (businesses using Zoho Books), platform: Zoho Books)_ `CG-MCE-002#S071`
  > “Warning: You can only mark accounts you created manually as inactive. The default accounts cannot be marked as inactive.” — [Zoho Corporation — Chart of Accounts | Help | Zoho Books](https://www.zoho.com/us/books/help/accountant/chart-of-accounts.html), no last-updated date published on the page (retrieved 2026-09-08); Other Actions in Chart of Accounts — Mark an Account as Inactive (Warning). Verified 2026-09-08.

- <a id="s-CG-MCE-002-S072"></a>Only manually created accounts can be deleted; system default accounts cannot be deleted. _(jurisdiction: not stated in the document, entity_scope: Zoho Books organizations (businesses using Zoho Books), platform: Zoho Books)_ `CG-MCE-002#S072`
  > “Warning: You can only delete accounts you’ve created manually. System default accounts cannot be deleted.” — [Zoho Corporation — Chart of Accounts | Help | Zoho Books](https://www.zoho.com/us/books/help/accountant/chart-of-accounts.html), no last-updated date published on the page (retrieved 2026-09-08); Other Actions in Chart of Accounts — Delete an Account (Warning). Verified 2026-09-08.

- <a id="s-CG-MCE-002-S073"></a>Default accounts cannot be made inactive in QuickBooks Online, because QuickBooks uses certain accounts as default accounts for features. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S073`
  > “You can't make default accounts inactive. QuickBooks uses certain accounts as default accounts for features .” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about accounts that you can’t make inactive — Default accounts. Verified 2026-09-08.

- See above: An account used by products or services cannot be made inactive until the products and services are relinked to a different account or made inactive themselves. ([CG-MCE-002#S074](#s-CG-MCE-002-S074))

- <a id="s-CG-MCE-002-S075"></a>An income account with pending charges cannot be made inactive until the customers are invoiced for the billable expenses, time or charges. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S075`
  > “If your income account has pending charges, you can’t make them inactive. To do so, you can invoice your customers for the billable expenses, time, or charges .” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about accounts that you can’t make inactive — Accounts with pending charges. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S076"></a>Recurring transactions linked to an account must be unlinked before that account can be made inactive. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S076`
  > “If you have recurring transactions linked to an account, you need to unlink them before you can make them inactive.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about accounts that you can’t make inactive — Accounts linked to recurring transactions. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S077"></a>An account that has subaccounts cannot be made inactive until the subaccounts are moved to a different account on the chart of accounts. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S077`
  > “If the account has subaccounts, you can’t make them inactive. To do so, you can move the subaccounts to a different account on your chart of accounts .” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about accounts that you can’t make inactive — Accounts with subaccounts. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S078"></a>A banking account is made inactive by disconnecting it, after which QuickBooks will not download new transactions while the existing accounting data does not change. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials; QuickBooks Ledger; Intuit Enterprise Suite; QuickBooks Solopreneur Plus)_ `CG-MCE-002#S078`
  > “To make a banking account inactive, you can disconnect it . QuickBooks won’t download new transactions, but your existing accounting data won't change.” — [Intuit Inc. — Make an account inactive on your chart of accounts in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/list-management/delete-account-chart-accounts-quickbooks-online/L0KFpdIeu_US_en_US), 2026-08-05; Know more about accounts that you can’t make inactive — Banking accounts. Verified 2026-09-08.

- See above: Intuit instructs users not to merge accounts that are connected to online banking, nor accounts that QuickBooks itself creates, of which the direct deposit funding account is given as an example. ([CG-MCE-002#S079](#s-CG-MCE-002-S079))

- <a id="s-CG-MCE-002-S080"></a>A Sage 50 company can have only one retained earnings account. _(jurisdiction: US, entity_scope: businesses maintaining a chart of accounts in Sage 50, platform: Sage 50 (U.S.), platform_edition: 2026)_ `CG-MCE-002#S080`
  > “You can have only one retained earnings account 
 in Sage 50 .” — [The Sage Group plc (Sage 50 U.S. product help) — Account Types (Maintain Chart of Accounts)](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/Chart_of_Accounts/Maintain_Chart_of_Accounts_Account_Types.htm), 2026-06-17; Account Types — 'Equity - Retained Earnings'. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S081"></a>The Account ID identifies the account in the chart of accounts, lookup lists, transactions and reports, and may be up to 15 alphanumeric characters. _(jurisdiction: US, entity_scope: businesses maintaining a chart of accounts in Sage 50, platform: Sage 50 (U.S.), platform_edition: 2026)_ `CG-MCE-002#S081`
  > “This identifies the account in the chart of accounts, lookup lists, 
 transactions, and reports. Enter up to 15 alphanumeric characters to name 
 the account.” — [The Sage Group plc (Sage 50 U.S. product help) — Maintain Chart of Accounts](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/Chart_of_Accounts/Maintain_Chart_of_Accounts.htm), 2026-06-17; Maintain Chart of Accounts — 'Account ID' field help. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S129"></a>Sage 50 states the account naming convention is important so the system is easily understood by everybody who uses it, and that the standard convention used by the sample companies shipped with Sage 50 can be copied as a guideline. _(jurisdiction: US, entity_scope: businesses maintaining a chart of accounts in Sage 50, platform: Sage 50 (U.S.), platform_edition: 2026)_ `CG-MCE-002#S129`
  > “The naming convention for accounts is important; you want to be able 
 to establish a system that is easily understood by everybody who uses 
 the system. The sample companies that come with Sage 50 use a standard 
 convention and can be copied and used as a guideline.” — [The Sage Group plc (Sage 50 U.S. product help) — Maintain Chart of Accounts](https://help-sage50.na.sage.com/en-us/2026/Content/Banking_General_Ledger/Chart_of_Accounts/Maintain_Chart_of_Accounts.htm), 2026-06-17; Maintain Chart of Accounts — 'Account ID' field help. Verified 2026-09-08.

## Everything downstream that still points at the accounts you changed
<a id="need-CG-MCE-002-P7"></a>

- See above: If the Inventory/Stock Asset or Cost of Goods Sold/Cost of Sales accounts are edited or deactivated, any edits to Products/Services will be recreated. ([CG-MCE-002#S066](#s-CG-MCE-002-S066))

- See above: Sales of Product Income is the default account QuickBooks Online creates to track sales for inventory items and should not be deleted or renamed; if it is deleted or renamed, QuickBooks Online will create a new account to take its place. ([CG-MCE-002#S067](#s-CG-MCE-002-S067))

- See above: QuickBooks Online creates a '(Sales tax agency name) Payable' account when sales tax is set up for a tax agency, and that account then reports the sales tax for every transaction. ([CG-MCE-002#S068](#s-CG-MCE-002-S068))

- See above: An account used by products or services cannot be made inactive until the products and services are relinked to a different account or made inactive themselves. ([CG-MCE-002#S074](#s-CG-MCE-002-S074))

- See above: Recurring transactions linked to an account must be unlinked before that account can be made inactive. ([CG-MCE-002#S076](#s-CG-MCE-002-S076))

- <a id="s-CG-MCE-002-S082"></a>A bank rule holds a reference to a specific bank or credit card account, or to all bank accounts. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials, QuickBooks Ledger, Intuit Enterprise Suite, QuickBooks Online Lite, QuickBooks Solopreneur Plus (article's stated applicability list))_ `CG-MCE-002#S082`
  > “From the in ▼ dropdown, select a bank or credit card account, or select All bank accounts .” — [Intuit Inc. — Set up bank rules to categorize online banking transactions in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/banking/set-bank-rules-categorize-online-banking-online/L0mjJl0nD_US_en_US), 2026-09-07; Step 1: Create a bank rule, step 5. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S083"></a>A bank rule's settings include the transaction type, the category, tags and the payee that the rule applies to a matching transaction. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials, QuickBooks Ledger, Intuit Enterprise Suite, QuickBooks Online Lite, QuickBooks Solopreneur Plus (article's stated applicability list))_ `CG-MCE-002#S083`
  > “Select the settings for the rule. Select the Transaction type , Category , Tags , and the Payee to apply.” — [Intuit Inc. — Set up bank rules to categorize online banking transactions in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/banking/set-bank-rules-categorize-online-banking-online/L0mjJl0nD_US_en_US), 2026-09-07; Step 1: Create a bank rule, step 7. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S084"></a>QuickBooks automatically applies the company's bank rules to transactions in the For review tab. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials, QuickBooks Ledger, Intuit Enterprise Suite, QuickBooks Online Lite, QuickBooks Solopreneur Plus (article's stated applicability list))_ `CG-MCE-002#S084`
  > “QuickBooks automatically applies your rules to transactions in the For review tab. These are the ones you need to review every day.” — [Intuit Inc. — Set up bank rules to categorize online banking transactions in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/banking/set-bank-rules-categorize-online-banking-online/L0mjJl0nD_US_en_US), 2026-09-07; Step 1: Create a bank rule (after the numbered steps). Verified 2026-09-08.

- <a id="s-CG-MCE-002-S085"></a>Transactions on the Pending tab that meet an auto-post rule's conditions are added automatically, and auto-post rules run at sign-in, on file upload, and when an auto-post rule is created or modified. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, Plus, Simple Start, Essentials, QuickBooks Ledger, Intuit Enterprise Suite, QuickBooks Online Lite, QuickBooks Solopreneur Plus (article's stated applicability list))_ `CG-MCE-002#S085`
  > “After you create an auto-post rule, any transactions on the Pending tab that meet the conditions are automatically added. Auto-post rules run when you sign in, upload a file, or create or modify a new auto-post rule.” — [Intuit Inc. — Set up bank rules to categorize online banking transactions in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/banking/set-bank-rules-categorize-online-banking-online/L0mjJl0nD_US_en_US), 2026-09-07; Next steps: Set up auto-post. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S087"></a>When a user edits an item or customer that a recurring template uses, QuickBooks Online displays a message telling the user that the change affects recurring templates and offers options. _(jurisdiction: United States, entity_scope: QuickBooks Online subscribers, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite, conditions: the edited item or customer is used by a recurring template)_ `CG-MCE-002#S087`
  > “If you edit an item or customer that's used by a recurring template, you'll get a message. QuickBooks tells you if the changes affect any recurring templates. You have a few options:” — [Intuit Inc. — Edit a recurring template](https://quickbooks.intuit.com/learn-support/en-us/help-article/memorize-transactions/edit-recurring-template/L0eW5Sjrh_US_en_US), 2026-08-05; Learn what happens if you update items, customers, or settings used by recurring templates > Editing items or customers. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S088"></a>Editing company settings used by a recurring template affects recurring templates, and unlike item or customer edits the user does not see a warning message. _(jurisdiction: United States, entity_scope: QuickBooks Online subscribers, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite)_ `CG-MCE-002#S088`
  > “If you edit company settings that are used by a recurring template, you'll get a message. Unlike items or customers, you won't see a warning message. However, making changes to the following fields will affect recurring templates:” — [Intuit Inc. — Edit a recurring template](https://quickbooks.intuit.com/learn-support/en-us/help-article/memorize-transactions/edit-recurring-template/L0eW5Sjrh_US_en_US), 2026-08-05; Learn what happens if you update items, customers, or settings used by recurring templates > Editing company settings. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S089"></a>The company settings that affect recurring templates include the account for tax, the account for shipping, the account for discount and the MAS deposit account, alongside the customer estimates message, customer sales forms message and sales tax rate. _(jurisdiction: United States, entity_scope: QuickBooks Online subscribers, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite)_ `CG-MCE-002#S089`
  > “- Customer estimates message
- Customer sales forms message
- Sales tax rate
- Account for tax
- Account for shipping
- Account for discount
- MAS deposit account” — [Intuit Inc. — Edit a recurring template](https://quickbooks.intuit.com/learn-support/en-us/help-article/memorize-transactions/edit-recurring-template/L0eW5Sjrh_US_en_US), 2026-08-05; Editing company settings, list of fields. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S090"></a>Turning Sales Tax off does not update any recurring templates in QuickBooks Online. _(jurisdiction: United States, entity_scope: QuickBooks Online subscribers, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite, conditions: Sales Tax is turned off)_ `CG-MCE-002#S090`
  > “When you turn Sales Tax off, QuickBooks Online also won't update any recurring templates.” — [Intuit Inc. — Edit a recurring template](https://quickbooks.intuit.com/learn-support/en-us/help-article/memorize-transactions/edit-recurring-template/L0eW5Sjrh_US_en_US), 2026-08-05; Editing company settings > Sales tax exceptions. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S091"></a>Before building a budget, every account to be included in the budget must already be listed in the chart of accounts. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, Intuit Enterprise Suite (article's stated applicability list))_ `CG-MCE-002#S091`
  > “Verify that every account you want to include in your budget is listed in your chart of accounts.” — [Intuit Inc. — Create budgets in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/taxation/create-import-budgets-quickbooks-online/L7SvmSAsU_US_en_US), 2026-08-21; Prerequisites. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S092"></a>QuickBooks Online Payroll has payroll accounting settings that map payroll transactions to accounts. _(jurisdiction: United States, entity_scope: QuickBooks Online Payroll subscribers, platform: QuickBooks Online Payroll, platform_edition: QuickBooks Online Payroll Elite, QuickBooks Online Payroll Premium, QuickBooks Online Payroll Core)_ `CG-MCE-002#S092`
  > “Learn how to manage your payroll accounting settings to map your payroll transactions.” — [Intuit Inc. — Change your accounting preferences in payroll in QuickBooks Online Payroll](https://quickbooks.intuit.com/learn-support/en-us/help-article/payroll-processes/set-payroll-account-preferences/L9oiYu7wu_US_en_US), 2026-08-03; Introduction. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S093"></a>QuickBooks creates default accounts itself for recording payroll liabilities and expenses, and the user can customize which accounts are used. _(jurisdiction: United States, entity_scope: QuickBooks Online Payroll subscribers, platform: QuickBooks Online Payroll, platform_edition: QuickBooks Online Payroll Elite, QuickBooks Online Payroll Premium, QuickBooks Online Payroll Core)_ `CG-MCE-002#S093`
  > “QuickBooks automatically creates default accounts where your liabilities and expenses are recorded. But you can also customize these accounts to meet your accounting needs.” — [Intuit Inc. — Change your accounting preferences in payroll in QuickBooks Online Payroll](https://quickbooks.intuit.com/learn-support/en-us/help-article/payroll-processes/set-payroll-account-preferences/L9oiYu7wu_US_en_US), 2026-08-03; Introduction. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S094"></a>The payroll accounting preference records which account payroll transactions are posted to, chosen by name from the chart of accounts. _(jurisdiction: United States, entity_scope: QuickBooks Online Payroll subscribers, platform: QuickBooks Online Payroll, platform_edition: QuickBooks Online Payroll Elite, QuickBooks Online Payroll Premium, QuickBooks Online Payroll Core)_ `CG-MCE-002#S094`
  > “Enter the name of the account, or scroll to choose which account the transactions should go to.” — [Intuit Inc. — Change your accounting preferences in payroll in QuickBooks Online Payroll](https://quickbooks.intuit.com/learn-support/en-us/help-article/payroll-processes/set-payroll-account-preferences/L9oiYu7wu_US_en_US), 2026-08-03; Step 2, step 4. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S095"></a>Reclassifying past payroll transactions is limited to 200 transactions per date range, and exceeding it produces an error requiring a shorter date period. _(jurisdiction: United States, entity_scope: QuickBooks Online Payroll subscribers, platform: QuickBooks Online Payroll, platform_edition: QuickBooks Online Payroll Elite, QuickBooks Online Payroll Premium, QuickBooks Online Payroll Core)_ `CG-MCE-002#S095`
  > “Note: There's a limit of 200 transactions per date range. So if you receive an error "There are too many transactions to update all at once.", reduce the start and end date period.” — [Intuit Inc. — Change your accounting preferences in payroll in QuickBooks Online Payroll](https://quickbooks.intuit.com/learn-support/en-us/help-article/payroll-processes/set-payroll-account-preferences/L9oiYu7wu_US_en_US), 2026-08-03; To change past transactions, Note. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S096"></a>Intuit advises consulting an accountant before changing payroll accounts because the change may affect reports such as the Profit and Loss or Balance Sheet. _(jurisdiction: United States, entity_scope: QuickBooks Online Payroll subscribers, platform: QuickBooks Online Payroll, platform_edition: QuickBooks Online Payroll Elite, QuickBooks Online Payroll Premium, QuickBooks Online Payroll Core)_ `CG-MCE-002#S096`
  > “Not sure what payroll account to use? Consult your accountant before making changes to accounts as this may affect your reports such as your Profit and Loss or Balance Sheet.” — [Intuit Inc. — Change your accounting preferences in payroll in QuickBooks Online Payroll](https://quickbooks.intuit.com/learn-support/en-us/help-article/payroll-processes/set-payroll-account-preferences/L9oiYu7wu_US_en_US), 2026-08-03; Account type to use for your payroll transactions. Verified 2026-09-08.

_Not established from an authoritative source._

## Prove the figures that had to stay the same did
<a id="need-CG-MCE-002-P8"></a>

- See above: Before a balance sheet account is made inactive its balance should be zero; if it is not, QuickBooks Online creates an automatic adjustment entry to zero it out and adds it to the Opening Balance Equity account, which can affect balances and sales tax reports. ([CG-MCE-002#S022](#s-CG-MCE-002-S022))

- See above: If an account with a balance is made inactive, QuickBooks creates a journal entry moving the balance to another account, transactions stay on the financial reports, and reactivating the account does not move the balance back. ([CG-MCE-002#S023](#s-CG-MCE-002-S023))

- <a id="s-CG-MCE-002-S100"></a>A taxpayer using a computerized system must be able to produce sufficient legible records to support and verify entries made on the return and determine the correct tax liability; to meet that qualification the machine-sensible records must reconcile with the books and the return, and must provide enough detail to identify the underlying source documents. _(jurisdiction: United States — federal tax (Internal Revenue Code), entity_scope: businesses / new business owners keeping records for federal tax purposes, effective_from: Publication 583 revised December 2024, conditions: the taxpayer uses a computerized system)_ `CG-MCE-002#S100`
  > “If you use a computerized system, you must be able to produce sufficient legible records to support and verify entries made on your return and determine your correct tax liability. To meet this qualification, the machine-sensible records must reconcile with your books and return. These records must provide enough detail to identify the underlying source documents.” — [Internal Revenue Service — Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583), 2024-12; Recordkeeping — Computerized System. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S101"></a>Under the double-entry system the total debits must equal the total credits after the journal entries are posted to the ledger accounts, and if the amounts do not balance an error has been made that must be found and corrected. _(jurisdiction: United States — federal tax (Internal Revenue Code), entity_scope: businesses / new business owners keeping records for federal tax purposes, effective_from: Publication 583 revised December 2024)_ `CG-MCE-002#S101`
  > “Under this system, the total debits must equal the total credits after you post the journal entries to the ledger accounts. If the amounts do not balance, you have made an error and you must find and correct it.” — [Internal Revenue Service — Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583), 2024-12; Recordkeeping — Bookkeeping System — Double-entry.. Verified 2026-09-08.

- See above: A change in the classification of an item between periods, resulting from a change in the allocation or grouping of items within or among relevant categories, is a matter of presentation and is not in itself a change in accounting policy; but to enhance comparability with the current period the item should be reclassified in the prior period's financial statements to conform with the new presentation. ([CG-MCE-002#S118](#s-CG-MCE-002-S118))

_Partly established. Established: the balances that legitimately moved and why (S022, S023, S028). Missing: the totals that must be identical to the baseline; how the reader demonstrates each._

_Required authority: authoritative professional or accounting standard, official platform documentation. Highest achieved: official platform documentation, primary regulator or government._

## Sequence the work so the file is never half-changed
<a id="need-CG-MCE-002-P9"></a>

- See above: Intuit instructs the user to save the reconciliation reports of the account that will be merged away before beginning the merge. ([CG-MCE-002#S014](#s-CG-MCE-002-S014))

- See above: QuickBooks Online tells the user to consult their accountant before making an account inactive, to confirm the change is right for them. ([CG-MCE-002#S027](#s-CG-MCE-002-S027))

- See above: Where both account registers carry an opening balance equity transaction, Intuit instructs the user to delete the more recent of the two before merging. ([CG-MCE-002#S034](#s-CG-MCE-002-S034))

- See above: When the user chooses to Purge after closing the fiscal year, all accounts that have no outstanding transactions are eligible for purging. ([CG-MCE-002#S053](#s-CG-MCE-002-S053))

- See above: In the QuickBooks Online Chart of Accounts a parent account and all of its subaccounts must share the same account type; to change the type of such a group, each subaccount is first detached to become a parent account, its type edited, then the parent account's type changed, and the accounts re-added under the parent. ([CG-MCE-002#S057](#s-CG-MCE-002-S057))

- See above: Every subaccount in the group must be converted and re-typed before the parent account's own account type is changed. ([CG-MCE-002#S058](#s-CG-MCE-002-S058))

- See above: Intuit advises consulting an accountant before changing payroll accounts because the change may affect reports such as the Profit and Loss or Balance Sheet. ([CG-MCE-002#S096](#s-CG-MCE-002-S096))

- <a id="s-CG-MCE-002-S120"></a>Closing accounts part way through a fiscal year is a particular problem because financial statement line items then no longer show consistent results within that year. _(jurisdiction: not stated in the document, entity_scope: organizations generally, conditions: accounts closed part way through a fiscal year)_ `CG-MCE-002#S120`
  > “This is a particular problem if accounts are being closed part way through a fiscal year , so that financial statement line items no longer show consistent results within the year.” — [AccountingTools, Inc. — How to improve your chart of accounts](https://www.accountingtools.com/articles/reduce-the-chart-of-accounts), undated at census time (page footer: Copyright 2026); Reducing the Chart of Accounts. Verified 2026-09-08.

## Stop the chart from growing back
<a id="need-CG-MCE-002-P10"></a>

- See above: The account list should be reviewed periodically to find accounts holding relatively immaterial amounts. ([CG-MCE-002#S004](#s-CG-MCE-002-S004))

- See above: Regular audits of the chart of accounts should be conducted to identify outdated or unused accounts. ([CG-MCE-002#S007](#s-CG-MCE-002-S007))

- See above: Closing accounts part way through a fiscal year is a particular problem because financial statement line items then no longer show consistent results within that year. ([CG-MCE-002#S120](#s-CG-MCE-002-S120))

- <a id="s-CG-MCE-002-S122"></a>Because consistency is needed, changes to the chart of accounts should be rare. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S122`
  > “Given the need for consistency, changes to the chart of accounts should be quite rare.” — [AccountingTools, Inc. — Chart of accounts definition](https://www.accountingtools.com/articles/the-chart-of-accounts), undated at census time; AccountingTools re-dates articles on revision (page footer: Copyright 2026); Chart of Accounts Best Practices > Require approvals for changes. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S123"></a>The controller should approve all proposed changes to the chart of accounts so only the most essential alterations are made. _(jurisdiction: not stated in the document, entity_scope: organizations that have a controller)_ `CG-MCE-002#S123`
  > “To ensure that only the most essential alterations are enacted, have the controller approve all proposed changes.” — [AccountingTools, Inc. — Chart of accounts definition](https://www.accountingtools.com/articles/the-chart-of-accounts), undated at census time; AccountingTools re-dates articles on revision (page footer: Copyright 2026); Chart of Accounts Best Practices > Require approvals for changes. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S124"></a>These points should at least be used as discussion points whenever anyone wants to add accounts, to stop the chart becoming more bloated. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S124`
  > “Even if these points are not sufficiently persuasive to result in a wholesale reduction in the number of accounts, at least use them as discussion points whenever anyone wants to increase the number of accounts – hopefully, these concepts will prevent the chart of accounts from becoming more bloated than its current state.” — [AccountingTools, Inc. — How to improve your chart of accounts](https://www.accountingtools.com/articles/reduce-the-chart-of-accounts), undated at census time (page footer: Copyright 2026); Reducing the Chart of Accounts. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S125"></a>A structured, consistent account numbering system should be implemented, leaving gaps between account numbers for future additions. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S125`
  > “Use a logical numbering system . Implement a structured and consistent numbering system for accounts, and leave gaps between account numbers for future additions.” — [AccountingTools, Inc. — How to improve your chart of accounts](https://www.accountingtools.com/articles/reduce-the-chart-of-accounts), undated at census time (page footer: Copyright 2026); Other Ways to Optimize the Chart of Accounts > Use a logical numbering system. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S126"></a>Account names and numbering conventions should be standardised across the organization. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S126`
  > “Maintain consistency . Standardize account names and numbering conventions across the organization.” — [AccountingTools, Inc. — How to improve your chart of accounts](https://www.accountingtools.com/articles/reduce-the-chart-of-accounts), undated at census time (page footer: Copyright 2026); Other Ways to Optimize the Chart of Accounts > Maintain consistency. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S128"></a>The common three-digit coding scheme given allocates 100-199 to assets, 200-299 to liabilities, 300-399 to equity accounts, 400-499 to revenues and 500-599 to expenses. _(jurisdiction: not stated in the document, entity_scope: organizations generally, conditions: described as a common scheme, not a mandated one)_ `CG-MCE-002#S128`
  > “However, a common coding scheme is as follows:
 Assets - Account codes 100-199
 Liabilities - 200-299
 Equity accounts - 300-399
 Revenues - 400-499
 Expenses - 500-599” — [AccountingTools, Inc. (author Steven Bragg) — Chart of accounts numbering](https://www.accountingtools.com/articles/chart-of-accounts-numbering.html), 2026-07-23; How to Create a Numbering System for a Chart of Accounts (common coding scheme). Verified 2026-09-08.

- See above: Sage 50 states the account naming convention is important so the system is easily understood by everybody who uses it, and that the standard convention used by the sample companies shipped with Sage 50 can be copied as a guideline. ([CG-MCE-002#S129](#s-CG-MCE-002-S129))

_Partly established. Established: who may create an account (S123); the naming discipline (S125, S126, S128, S129). Missing: the periodic review that catches new duplicates early._

_Required authority: authoritative professional or accounting standard, high quality professional secondary reference. Highest achieved: high quality professional secondary reference, official platform documentation._

## Reference: what merging, retiring, renaming and re-typing do in each platform
<a id="need-CG-MCE-002-C1"></a>

- See above: An account type determines how QuickBooks tracks money for that account and which financial report - Balance Sheet or Profit & Loss - displays its data. ([CG-MCE-002#S009](#s-CG-MCE-002-S009))

- See above: In Sage 50, an account's type determines how the account is grouped in reports and financial statements and also controls what happens to the account during fiscal year-end. ([CG-MCE-002#S010](#s-CG-MCE-002-S010))

- See above: A successful merge in QuickBooks Online requires both accounts to have identical name, account type and detail type beforehand. ([CG-MCE-002#S011](#s-CG-MCE-002-S011))

- <a id="s-CG-MCE-002-S013"></a>Detail types affect neither the accounting nor which report an account's data appears on; they exist primarily for the user's own organisation and clarity. _(jurisdiction: United States, entity_scope: QuickBooks Online company files (small business), platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Online Accountant, QuickBooks Ledger, Intuit Enterprise Suite, Intuit Accountant Suite)_ `CG-MCE-002#S013`
  > “Detail types do not affect the accounting or which report the data appears on. They are primarily for your own organization and clarity.” — [Intuit Inc. — Account type and detail types in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/chart-accounts/learn-account-detail-types-chart-accounts/L2gCy0rfy_US_en_US), 2026-08-05; Detail types > Impact. Verified 2026-09-08.

- See above: After a merge the merged-away account loses its reconciliation history, while its transactions remain in the file and retain their reconciled status. ([CG-MCE-002#S015](#s-CG-MCE-002-S015))

- See above: In QuickBooks Online an account cannot be deleted; it can only be made inactive or merged with another account. ([CG-MCE-002#S020](#s-CG-MCE-002-S020))

- See above: Making an account inactive in QuickBooks Online does not remove the transactions posted to it. ([CG-MCE-002#S021](#s-CG-MCE-002-S021))

- See above: Before a balance sheet account is made inactive its balance should be zero; if it is not, QuickBooks Online creates an automatic adjustment entry to zero it out and adds it to the Opening Balance Equity account, which can affect balances and sales tax reports. ([CG-MCE-002#S022](#s-CG-MCE-002-S022))

- See above: If an account with a balance is made inactive, QuickBooks creates a journal entry moving the balance to another account, transactions stay on the financial reports, and reactivating the account does not move the balance back. ([CG-MCE-002#S023](#s-CG-MCE-002-S023))

- See above: A transaction related to an inactive account cannot be edited; the account must first be restored, the entry deleted from the register, and corrected to a zero balance before the account is made inactive again. ([CG-MCE-002#S024](#s-CG-MCE-002-S024))

- See above: Reactivating an account in QuickBooks Online does not bring back transactions or redo journal entries. ([CG-MCE-002#S025](#s-CG-MCE-002-S025))

- See above: Inactive accounts and their transactions still appear when reports are run in QuickBooks Online; reports can be customized to hide inactive accounts, but doing so may affect accuracy. ([CG-MCE-002#S026](#s-CG-MCE-002-S026))

- See above: In QuickBooks Online, merging two chart-of-accounts accounts moves all past transactions of the duplicate into the account that is kept and sets the duplicate account to inactive. ([CG-MCE-002#S028](#s-CG-MCE-002-S028))

- See above: A chart-of-accounts merge in QuickBooks Online is permanent and cannot be undone. ([CG-MCE-002#S029](#s-CG-MCE-002-S029))

- See above: When merging a subaccount into a parent account, the Account Type must be changed to match the parent account. ([CG-MCE-002#S031](#s-CG-MCE-002-S031))

- See above: Marking an account inactive is reversible: the same steps with Mark as Active restore the account to active. ([CG-MCE-002#S037](#s-CG-MCE-002-S037))

- See above: An account associated with any transactions cannot be deleted; the transactions must first be updated to use another account or deleted individually. ([CG-MCE-002#S038](#s-CG-MCE-002-S038))

- See above: The account type of Zoho Books' default accounts cannot be changed, and those accounts cannot be marked inactive. ([CG-MCE-002#S039](#s-CG-MCE-002-S039))

- See above: An account's type cannot be changed once transactions have been created using it; the stated alternative is to mark that account inactive, create a new account and associate the transactions with the new account. ([CG-MCE-002#S040](#s-CG-MCE-002-S040))

- See above: Accounts Receivable, Accounts Payable, Unearned Revenue, Retained Earnings, Fixed accounts, Inventory Tracked accounts and Bank accounts are not listed in the Bulk Update account dropdown. ([CG-MCE-002#S041](#s-CG-MCE-002-S041))

- See above: Archiving a Wave account leaves transactions already posted to that account unchanged. ([CG-MCE-002#S043](#s-CG-MCE-002-S043))

- See above: An archived Wave account continues to appear on reports for periods in which transactions exist, but new transactions can no longer be categorized to it. ([CG-MCE-002#S044](#s-CG-MCE-002-S044))

- See above: Archiving is reversible in Wave: restoring an archived account makes it available for categorizing transactions again. ([CG-MCE-002#S045](#s-CG-MCE-002-S045))

- See above: For some accounts that have been created in Wave, the account type and the currency cannot be edited. ([CG-MCE-002#S046](#s-CG-MCE-002-S046))

- See above: Wave's stated remedy when an account was created under the wrong type and its type cannot be changed is to create a new account under the correct type. ([CG-MCE-002#S048](#s-CG-MCE-002-S048))

- See above: Wave's account edit form updates the account details, and the account ID and description fields are viewed and edited through an 'Edit account ID and description' control. ([CG-MCE-002#S050](#s-CG-MCE-002-S050))

- See above: Once an account ID has been entered and saved, that ID cannot be changed or edited, though the account description can be changed. ([CG-MCE-002#S051](#s-CG-MCE-002-S051))

- See above: An account no longer planned to be used may be made inactive; attempting to use an inactive account produces a warning that the account is inactive and asks whether to continue. ([CG-MCE-002#S052](#s-CG-MCE-002-S052))

- See above: When the user chooses to Purge after closing the fiscal year, all accounts that have no outstanding transactions are eligible for purging. ([CG-MCE-002#S053](#s-CG-MCE-002-S053))

- See above: When an account ID is changed in Sage 50, all data records and transactions associated with that account — both current and past transactions — reflect the new ID. ([CG-MCE-002#S054](#s-CG-MCE-002-S054))

- See above: Sage 50 permits the Account Type of an existing account that has balances and transactions applied to it to be changed, but strongly recommends against doing so because the change will change the company's financial statements. ([CG-MCE-002#S055](#s-CG-MCE-002-S055))

- See above: QuickBooks Online permits the account type of an existing parent account or subaccount to be changed after the account exists. ([CG-MCE-002#S056](#s-CG-MCE-002-S056))

- See above: In the QuickBooks Online Chart of Accounts a parent account and all of its subaccounts must share the same account type; to change the type of such a group, each subaccount is first detached to become a parent account, its type edited, then the parent account's type changed, and the accounts re-added under the parent. ([CG-MCE-002#S057](#s-CG-MCE-002-S057))

- See above: Every subaccount in the group must be converted and re-typed before the parent account's own account type is changed. ([CG-MCE-002#S058](#s-CG-MCE-002-S058))

- See above: Once every account in the group carries the same account type, the accounts can be edited back into subaccounts and re-linked to the parent account — the detachment performed to change the type is reversible. ([CG-MCE-002#S059](#s-CG-MCE-002-S059))

- See above: To be re-linked as a subaccount, an account must be set to the account type of its parent account. ([CG-MCE-002#S060](#s-CG-MCE-002-S060))

- See above: Default accounts cannot be made inactive in QuickBooks Online, because QuickBooks uses certain accounts as default accounts for features. ([CG-MCE-002#S073](#s-CG-MCE-002-S073))

- See above: An account used by products or services cannot be made inactive until the products and services are relinked to a different account or made inactive themselves. ([CG-MCE-002#S074](#s-CG-MCE-002-S074))

- See above: An income account with pending charges cannot be made inactive until the customers are invoiced for the billable expenses, time or charges. ([CG-MCE-002#S075](#s-CG-MCE-002-S075))

- See above: Recurring transactions linked to an account must be unlinked before that account can be made inactive. ([CG-MCE-002#S076](#s-CG-MCE-002-S076))

- See above: An account that has subaccounts cannot be made inactive until the subaccounts are moved to a different account on the chart of accounts. ([CG-MCE-002#S077](#s-CG-MCE-002-S077))

- See above: A banking account is made inactive by disconnecting it, after which QuickBooks will not download new transactions while the existing accounting data does not change. ([CG-MCE-002#S078](#s-CG-MCE-002-S078))

- See above: A Sage 50 company can have only one retained earnings account. ([CG-MCE-002#S080](#s-CG-MCE-002-S080))

_Partly established. Established: what happens to transactions already posted to the affected account (S015, S021, S023, S024, S026, S028, S043, S054, S078); what an account's type controls in the first place (S009, S010). Missing: what consolidating, retiring, renaming and changing the type of an account does in mainstream small-business accounting software; which of these actions can be reversed._

## Reference: accounts the software owns, and the features that hold a reference to an account
<a id="need-CG-MCE-002-C2"></a>

- See above: The account type of Zoho Books' default accounts cannot be changed, and those accounts cannot be marked inactive. ([CG-MCE-002#S039](#s-CG-MCE-002-S039))

- See above: Accounts Receivable, Accounts Payable, Unearned Revenue, Retained Earnings, Fixed accounts, Inventory Tracked accounts and Bank accounts are not listed in the Bulk Update account dropdown. ([CG-MCE-002#S041](#s-CG-MCE-002-S041))

- See above: For some accounts that have been created in Wave, the account type and the currency cannot be edited. ([CG-MCE-002#S046](#s-CG-MCE-002-S046))

- See above: In the QuickBooks Online Chart of Accounts a parent account and all of its subaccounts must share the same account type; to change the type of such a group, each subaccount is first detached to become a parent account, its type edited, then the parent account's type changed, and the accounts re-added under the parent. ([CG-MCE-002#S057](#s-CG-MCE-002-S057))

- See above: QuickBooks Online creates specific default accounts in the chart of accounts when a company is created, determined by the business entity selected, and creates other special accounts when certain actions are taken or features are turned on in settings. ([CG-MCE-002#S061](#s-CG-MCE-002-S061))

- See above: Some of the default accounts QuickBooks Online creates cannot be changed. ([CG-MCE-002#S062](#s-CG-MCE-002-S062))

- See above: The listed default accounts are created when QuickBooks is set up or when an event such as turning on the sales tax setting triggers them, and they cannot be made inactive or used for any other purpose. ([CG-MCE-002#S063](#s-CG-MCE-002-S063))

- See above: Opening Balance Equity is QuickBooks Online's default account for adjustments, and only its name may be edited; it is listed among accounts that cannot be made inactive or used for any other purpose. ([CG-MCE-002#S064](#s-CG-MCE-002-S064))

- See above: The Retained Earnings account reports the company's net income on the Balance Sheet report; its name can be edited but editing it is not recommended because the term is a common accounting term used in the Balance Sheet. ([CG-MCE-002#S065](#s-CG-MCE-002-S065))

- See above: If the Inventory/Stock Asset or Cost of Goods Sold/Cost of Sales accounts are edited or deactivated, any edits to Products/Services will be recreated. ([CG-MCE-002#S066](#s-CG-MCE-002-S066))

- See above: Sales of Product Income is the default account QuickBooks Online creates to track sales for inventory items and should not be deleted or renamed; if it is deleted or renamed, QuickBooks Online will create a new account to take its place. ([CG-MCE-002#S067](#s-CG-MCE-002-S067))

- See above: QuickBooks Online creates a '(Sales tax agency name) Payable' account when sales tax is set up for a tax agency, and that account then reports the sales tax for every transaction. ([CG-MCE-002#S068](#s-CG-MCE-002-S068))

- See above: Uncategorized Expense and Uncategorized Income are created automatically by QuickBooks Online and track money the business earned or spends that still needs to be categorized; they are listed as accounts that can be edited but not deactivated or merged. ([CG-MCE-002#S069](#s-CG-MCE-002-S069))

- See above: Billable Expense Income and Markup can only be deleted by merging them with the Services income account. ([CG-MCE-002#S070](#s-CG-MCE-002-S070))

- See above: Only manually created accounts can be marked inactive; Zoho Books' default accounts cannot be marked as inactive. ([CG-MCE-002#S071](#s-CG-MCE-002-S071))

- See above: Only manually created accounts can be deleted; system default accounts cannot be deleted. ([CG-MCE-002#S072](#s-CG-MCE-002-S072))

- See above: Default accounts cannot be made inactive in QuickBooks Online, because QuickBooks uses certain accounts as default accounts for features. ([CG-MCE-002#S073](#s-CG-MCE-002-S073))

- See above: An account used by products or services cannot be made inactive until the products and services are relinked to a different account or made inactive themselves. ([CG-MCE-002#S074](#s-CG-MCE-002-S074))

- See above: Recurring transactions linked to an account must be unlinked before that account can be made inactive. ([CG-MCE-002#S076](#s-CG-MCE-002-S076))

- See above: Intuit instructs users not to merge accounts that are connected to online banking, nor accounts that QuickBooks itself creates, of which the direct deposit funding account is given as an example. ([CG-MCE-002#S079](#s-CG-MCE-002-S079))

- See above: The Account ID identifies the account in the chart of accounts, lookup lists, transactions and reports, and may be up to 15 alphanumeric characters. ([CG-MCE-002#S081](#s-CG-MCE-002-S081))

- See above: A bank rule holds a reference to a specific bank or credit card account, or to all bank accounts. ([CG-MCE-002#S082](#s-CG-MCE-002-S082))

- See above: A bank rule's settings include the transaction type, the category, tags and the payee that the rule applies to a matching transaction. ([CG-MCE-002#S083](#s-CG-MCE-002-S083))

- See above: QuickBooks automatically applies the company's bank rules to transactions in the For review tab. ([CG-MCE-002#S084](#s-CG-MCE-002-S084))

- See above: Transactions on the Pending tab that meet an auto-post rule's conditions are added automatically, and auto-post rules run at sign-in, on file upload, and when an auto-post rule is created or modified. ([CG-MCE-002#S085](#s-CG-MCE-002-S085))

- See above: When a user edits an item or customer that a recurring template uses, QuickBooks Online displays a message telling the user that the change affects recurring templates and offers options. ([CG-MCE-002#S087](#s-CG-MCE-002-S087))

- See above: Editing company settings used by a recurring template affects recurring templates, and unlike item or customer edits the user does not see a warning message. ([CG-MCE-002#S088](#s-CG-MCE-002-S088))

- See above: The company settings that affect recurring templates include the account for tax, the account for shipping, the account for discount and the MAS deposit account, alongside the customer estimates message, customer sales forms message and sales tax rate. ([CG-MCE-002#S089](#s-CG-MCE-002-S089))

- See above: Turning Sales Tax off does not update any recurring templates in QuickBooks Online. ([CG-MCE-002#S090](#s-CG-MCE-002-S090))

- See above: Before building a budget, every account to be included in the budget must already be listed in the chart of accounts. ([CG-MCE-002#S091](#s-CG-MCE-002-S091))

- See above: QuickBooks Online Payroll has payroll accounting settings that map payroll transactions to accounts. ([CG-MCE-002#S092](#s-CG-MCE-002-S092))

- See above: QuickBooks creates default accounts itself for recording payroll liabilities and expenses, and the user can customize which accounts are used. ([CG-MCE-002#S093](#s-CG-MCE-002-S093))

- See above: The payroll accounting preference records which account payroll transactions are posted to, chosen by name from the chart of accounts. ([CG-MCE-002#S094](#s-CG-MCE-002-S094))

- See above: Reclassifying past payroll transactions is limited to 200 transactions per date range, and exceeding it produces an error requiring a shorter date period. ([CG-MCE-002#S095](#s-CG-MCE-002-S095))

_Partly established. Established: which accounts the software refuses to let a user retire or consolidate (S039, S063, S071, S072, S073, S074, S076). Missing: which accounts mainstream accounting software creates and maintains itself; which other features hold a reference to an account that must be repaired when that account is changed._

## Reference: consistency between periods and explaining a change in classification
<a id="need-CG-MCE-002-C3"></a>

- See above: Information about a reporting entity is more useful when it can be compared with similar information about other entities and with similar information about the same entity for another period or date. ([CG-MCE-002#S110](#s-CG-MCE-002-S110))

- See above: A single economic phenomenon can be faithfully represented in more than one way, but permitting alternative accounting methods for the same phenomenon diminishes comparability. ([CG-MCE-002#S111](#s-CG-MCE-002-S111))

- See above: One enhancing characteristic may have to be diminished to maximise another; a temporary reduction in comparability from prospectively applying a new financial reporting standard may be worthwhile for longer-term relevance or faithful representation, and appropriate disclosures may partially compensate for the resulting noncomparability. ([CG-MCE-002#S112](#s-CG-MCE-002-S112))

- See above: For some items a complete depiction may also require explanation of significant facts about the items' quality and nature and of the process used to determine the numerical depiction. ([CG-MCE-002#S113](#s-CG-MCE-002-S113))

- See above: Relevant, faithfully represented information is most useful when readily comparable with information from other entities and from the same entity in other periods, and increasing that comparability is one of the most important reasons financial reporting standards exist. ([CG-MCE-002#S114](#s-CG-MCE-002-S114))

- <a id="s-CG-MCE-002-S115"></a>Information is material if omitting or misstating it could influence users' decisions; materiality is an entity-specific aspect of relevance based on the nature or magnitude of the items concerned. _(jurisdiction: United States, entity_scope: reporting entities providing general purpose financial reports (FASB conceptual framework; Concepts Statements are not part of the FASB Accounting Standards Codification))_ `CG-MCE-002#S115`
  > “Information is material if omitting it or misstating it could influence
decisions that users make on the basis of the financial information of a specific
reporting entity. In other words, materiality is an entity-specific aspect of
relevance based on the nature or magnitude or both of the items to which the
information relates in the context of an individual entity’s financial report.” — [Financial Accounting Standards Board of the Financial Accounting Foundation — Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting — Chapter 3, Qualitative Characteristics of Useful Financial Information](https://storage.fasb.org/Concepts_Statement_No_8_Chapter_3_As_Issued.pdf), 2010-09; Chapter 3, Materiality, paragraph QC11. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S116"></a>Comparability in an entity's financial statements is enhanced when the same accounting policies are used consistently from period to period; consistency helps prevent misconceptions arising from applying different accounting policies in different periods, and when a change in accounting policy is deemed appropriate, disclosure of the effects of the change may be necessary to maintain comparability. _(jurisdiction: United States, entity_scope: small- and medium-sized entities that elect to use the AICPA FRF for SMEs accounting framework, accounting_basis: FRF for SMEs accounting framework (AICPA special purpose framework; not accounting principles generally accepted in the United States of America), conditions: use of the framework is optional; the document states it has no official or authoritative status)_ `CG-MCE-002#S116`
  > “Comparability in the financial statements of an entity is enhanced
    when the same accounting policies are used consistently from period to
    period. Consistency helps prevent misconceptions that might result from
    the application of different accounting policies in different periods. When a
    change in accounting policy is deemed to be appropriate, disclosure of the
    effects of the change may be necessary to maintain comparability.” — [American Institute of Certified Public Accountants (AICPA) — Financial Reporting Framework for Small- and Medium-Sized Entities](https://assets.ctfassets.net/rb9cdnjh59cm/3JxMgvNdsMPIRKA8A3GbS7/eb06b7b4fb1a8b028cf8375ff3c4eeda/frf-smes-framework.pdf), November 2017; Chapter 1, paragraph 1.15. Verified 2026-09-08.

- See above: Financial statements may be prepared on a comparative basis and comparative information is normally meaningful, but this may not be the case in some circumstances, such as when the financial structure of an entity has significantly changed or when a comprehensive revaluation of assets and liabilities has been made. ([CG-MCE-002#S117](#s-CG-MCE-002-S117))

- See above: A change in the classification of an item between periods, resulting from a change in the allocation or grouping of items within or among relevant categories, is a matter of presentation and is not in itself a change in accounting policy; but to enhance comparability with the current period the item should be reclassified in the prior period's financial statements to conform with the new presentation. ([CG-MCE-002#S118](#s-CG-MCE-002-S118))

- See above: Details about reclassifications of financial statement items made to conform to the present year's presentation should be disclosed. ([CG-MCE-002#S119](#s-CG-MCE-002-S119))

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._

## Reference: the record you have to leave behind
<a id="need-CG-MCE-002-C4"></a>

- See above: The recordkeeping system should include a summary of business transactions, ordinarily made in the books (for example accounting journals and ledgers), and the books must show gross income as well as deductions and credits. ([CG-MCE-002#S018](#s-CG-MCE-002-S018))

- See above: A taxpayer using a computerized system must be able to produce sufficient legible records to support and verify entries made on the return and determine the correct tax liability; to meet that qualification the machine-sensible records must reconcile with the books and the return, and must provide enough detail to identify the underlying source documents. ([CG-MCE-002#S100](#s-CG-MCE-002-S100))

- <a id="s-CG-MCE-002-S103"></a>The taxpayer must maintain, and make available to the Service upon request, documentation of the business processes that create the retained records, that modify and maintain its records, that satisfy the section 5.01(2) requirement to support and verify entries made on the return and determine the correct tax liability, and that evidence the authenticity and integrity of the taxpayer's records. _(jurisdiction: United States — federal tax (Internal Revenue Code; matters under the jurisdiction of the Commissioner of Internal Revenue), entity_scope: taxpayers whose records are maintained within an Automatic Data Processing (ADP) system, effective_from: taxable years beginning after December 31, 1997)_ `CG-MCE-002#S103`
  > “.01 The taxpayer must maintain and make available to the

Service upon request documentation of the business processes

that:

          (1) create the retained records;

          (2) modify and maintain its records;

          (3) satisfy the requirement of section 5.01(2) of this

revenue procedure to support and verify entries made on the

taxpayer's return and determine the correct tax liability; and

          (4) evidence the authenticity and integrity of the

taxpayer's records.” — [Internal Revenue Service — Rev. Proc. 98-25](https://www.irs.gov/pub/irs-drop/rp-98-25.pdf), Rev. Proc. 98-25, 1998-1 C.B. 689; Part III, Administrative, Procedural, and Miscellaneous; updates and supersedes Rev. Proc. 91-59; effective for machine-sensible records relating to taxable years beginning after December 31, 1997; SECTION 6. DOCUMENTATION, .01 (printed page -10-). Verified 2026-09-08.

- <a id="s-CG-MCE-002-S104"></a>The documentation described in section 6.01 must be sufficiently detailed to identify the functions being performed as they relate to the flow of data through the system, the internal controls used to ensure accurate and reliable processing, the internal controls used to prevent the unauthorized addition, alteration or deletion of retained records, and the charts of accounts and detailed account descriptions. _(jurisdiction: United States — federal tax (Internal Revenue Code; matters under the jurisdiction of the Commissioner of Internal Revenue), entity_scope: taxpayers whose records are maintained within an Automatic Data Processing (ADP) system, effective_from: taxable years beginning after December 31, 1997)_ `CG-MCE-002#S104`
  > “.02 The documentation described in section 6.01 of this

revenue procedure must be sufficiently detailed to identify:
                              -11-

          (1) the functions being performed as they relate to the

flow of data through the system;

          (2) the internal controls used to ensure accurate and

reliable processing;

          (3) the internal controls used to prevent the

unauthorized addition, alteration, or deletion of retained

records; and

          (4) the charts of accounts and detailed account

descriptions.” — [Internal Revenue Service — Rev. Proc. 98-25](https://www.irs.gov/pub/irs-drop/rp-98-25.pdf), Rev. Proc. 98-25, 1998-1 C.B. 689; Part III, Administrative, Procedural, and Miscellaneous; updates and supersedes Rev. Proc. 91-59; effective for machine-sensible records relating to taxable years beginning after December 31, 1997; SECTION 6. DOCUMENTATION, .02 (printed pages -10- to -11-). Verified 2026-09-08.

- <a id="s-CG-MCE-002-S105"></a>The QuickBooks Online audit log records account activities beyond financial transactions, including user sign-ins, settings changes, edits to customers, vendors and employees, and payroll submission. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online)_ `CG-MCE-002#S105`
  > “QuickBooks Online tracks not only financial transactions but all account activities in the audit log. This includes user sign-ins, changes to QuickBooks settings, edits to customers, vendors, employees, and payroll submission.” — [Intuit Inc. — Use the audit log in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/audit-log/use-audit-log-quickbooks-online/L2WoVnW6I_US_en_US), 2026-08-04; Intro, 'Use the audit log in QuickBooks Online'. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S106"></a>The audit log gives a detailed trail of who made changes and what actions they performed. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online)_ `CG-MCE-002#S106`
  > “The audit log provides a detailed trail of who made changes and what actions they performed to help you manage your books.” — [Intuit Inc. — Use the audit log in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/audit-log/use-audit-log-quickbooks-online/L2WoVnW6I_US_en_US), 2026-08-04; Intro, 'Use the audit log in QuickBooks Online'. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S107"></a>The audit log shows the date of each change, the user who made it, and any original transaction details. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online)_ `CG-MCE-002#S107`
  > “The audit log displays the date of the change, the user who made it, and any original transaction details.” — [Intuit Inc. — Use the audit log in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/audit-log/use-audit-log-quickbooks-online/L2WoVnW6I_US_en_US), 2026-08-04; 'Results' section. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S108"></a>Audit log events remain available for two years. _(jurisdiction: United States, entity_scope: businesses using QuickBooks Online, platform: QuickBooks Online)_ `CG-MCE-002#S108`
  > “Events recorded in the audit log are available for two years.” — [Intuit Inc. — Use the audit log in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/audit-log/use-audit-log-quickbooks-online/L2WoVnW6I_US_en_US), 2026-08-04; Intro, 'Use the audit log in QuickBooks Online'. Verified 2026-09-08.

- See above: Details about reclassifications of financial statement items made to conform to the present year's presentation should be disclosed. ([CG-MCE-002#S119](#s-CG-MCE-002-S119))

_Partly established. Established: a change to the ledger's structure leaves a traceable record of what was changed and when (S107). Missing: that record is sufficient to reconcile a previously issued report to the restructured file; the statements and the account balances as they stand are captured before the first structural change is made._

_Required authority: authoritative professional or accounting standard. Highest achieved: official platform documentation, primary regulator or government._

## Reference: professional criteria for judging a chart of accounts
<a id="need-CG-MCE-002-C5"></a>

- See above: The first step in improving a chart of accounts is a thorough review of the existing accounts to identify redundancies, inconsistencies and inactive items. ([CG-MCE-002#S001](#s-CG-MCE-002-S001))

- See above: The account list should be reviewed periodically to find accounts holding relatively immaterial amounts. ([CG-MCE-002#S004](#s-CG-MCE-002-S004))

- See above: An account with an immaterial balance whose information is not needed for special reports should be shut down and its stored information rolled into a larger account. ([CG-MCE-002#S005](#s-CG-MCE-002-S005))

- See above: Regular audits of the chart of accounts should be conducted to identify outdated or unused accounts. ([CG-MCE-002#S007](#s-CG-MCE-002-S007))

- See above: Excessive detail can raise maintenance effort, create posting errors and complicate reporting without adding decision value. ([CG-MCE-002#S008](#s-CG-MCE-002-S008))

- See above: Closing accounts part way through a fiscal year is a particular problem because financial statement line items then no longer show consistent results within that year. ([CG-MCE-002#S120](#s-CG-MCE-002-S120))

- See above: Because consistency is needed, changes to the chart of accounts should be rare. ([CG-MCE-002#S122](#s-CG-MCE-002-S122))

- See above: The controller should approve all proposed changes to the chart of accounts so only the most essential alterations are made. ([CG-MCE-002#S123](#s-CG-MCE-002-S123))

- See above: These points should at least be used as discussion points whenever anyone wants to add accounts, to stop the chart becoming more bloated. ([CG-MCE-002#S124](#s-CG-MCE-002-S124))

- See above: A structured, consistent account numbering system should be implemented, leaving gaps between account numbers for future additions. ([CG-MCE-002#S125](#s-CG-MCE-002-S125))

- See above: Account names and numbering conventions should be standardised across the organization. ([CG-MCE-002#S126](#s-CG-MCE-002-S126))

- <a id="s-CG-MCE-002-S127"></a>Use of miscellaneous or other accounts should be limited, to prevent loss of detail. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S127`
  > “Include a “miscellaneous” account sparingly . Limit the use of miscellaneous or other accounts to prevent loss of detail.” — [AccountingTools, Inc. — How to improve your chart of accounts](https://www.accountingtools.com/articles/reduce-the-chart-of-accounts), undated at census time (page footer: Copyright 2026); Other Ways to Optimize the Chart of Accounts > Include a “miscellaneous” account sparingly. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S130"></a>A chart of accounts should be granular enough to support meaningful management analysis and statutory reporting requirements. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S130`
  > “The chart of accounts should be granular enough to support meaningful management analysis and statutory reporting requirements.” — [AccountingTools, Inc. — Chart of accounts definition](https://www.accountingtools.com/articles/the-chart-of-accounts), undated at census time; AccountingTools re-dates articles on revision (page footer: Copyright 2026); FAQs > How granular should a chart of accounts be?. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S131"></a>The optimal granularity is the level that balances analytical usefulness against simplicity and scalability. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S131`
  > “The optimal level of granularity balances analytical usefulness with simplicity and scalability.” — [AccountingTools, Inc. — Chart of accounts definition](https://www.accountingtools.com/articles/the-chart-of-accounts), undated at census time; AccountingTools re-dates articles on revision (page footer: Copyright 2026); FAQs > How granular should a chart of accounts be?. Verified 2026-09-08.

- <a id="s-CG-MCE-002-S132"></a>A large chart of accounts leads to incorrect account usage, immaterial account balances, extensive accountant training, higher audit costs and incorrect financial statements. _(jurisdiction: not stated in the document, entity_scope: organizations generally)_ `CG-MCE-002#S132`
  > “Having a large chart of accounts leads to issues with incorrect account usage, immaterial account balances, extensive accountant training, higher audit costs, and incorrect financial statements .” — [AccountingTools, Inc. — How to improve your chart of accounts](https://www.accountingtools.com/articles/reduce-the-chart-of-accounts), undated at census time (page footer: Copyright 2026); The Problem With a Large Chart of Accounts. Verified 2026-09-08.

_Partly established. Established: what makes a structure more granular than the business can use (S008). Missing: what makes two accounts duplicates of each other; when an account counts as unused; the naming and account-creation conventions that keep those defects from re-forming after a cleanup._

## Not yet fully established from an authoritative source

- Establish what consolidating, retiring, renaming and changing the type of an account does in mainstream small-business accounting software, what happens to transactions already posted to the affected account, and which of these actions can be reversed, and what an account's type controls in the first place, so that an account carrying the wrong type can be recognised from where its balance currently reports. _(partly established)_
- Establish which accounts mainstream accounting software creates and maintains itself or refuses to let a user retire or consolidate, and which other features hold a reference to an account that must be repaired when that account is changed. _(partly established)_
- Establish the professional expectation for consistency of presentation between periods and for explaining a change in how amounts are classified when statements have already been issued. _(established; below the required authority class)_
- Establish the recordkeeping expectation that a change to the ledger's structure leaves a traceable record of what was changed and when, sufficient to reconcile a previously issued report to the restructured file, including the expectation that the statements and the account balances as they stand are captured before the first structural change is made, so that the restructured file can be reconciled back to them. _(partly established; below the required authority class)_
- Establish the recognised professional criteria for judging a small-business chart of accounts: what makes two accounts duplicates of each other, when an account counts as unused, what makes a structure more granular than the business can use, and the naming and account-creation conventions that keep those defects from re-forming after a cleanup. _(partly established)_
- Establish a survey method that classifies every account into a defect class - duplicate, unused, wrongly typed, over-granular, or sound - and identify the evidence in the ledger that puts an account into each class. _(not established)_
- Establish what must be captured before the first change - the statements and the account balances as they stand - and why that baseline is the only way to prove afterwards that the cleanup preserved what it had to preserve. _(not established; below the required authority class)_
- Distinguish consolidating, retiring, renaming and re-typing an account, state for each what happens to transactions already posted, and give the criteria for choosing between them for a given defect class. _(not established)_
- Establish which of these actions can be undone and which cannot, and require the irreversible ones to be identified before they are used. _(not established)_
- Establish what changing an account's type does to where its balance is reported and to comparability with statements that were already issued from the old structure. _(partly established; below the required authority class)_
- Establish the downstream repair list - categorisation rules, item mappings, recurring entries, budgets, saved reports and payroll or tax mappings - and require it to be worked through before the cleanup is called finished. _(not established)_
- Establish the verification step: name the totals that must be identical to the baseline, the balances that legitimately moved and why, and how the reader demonstrates each. _(partly established; below the required authority class)_
- Establish the controls that stop the structure regrowing - who may create an account, the naming discipline, and the periodic review that catches new duplicates early. _(partly established; below the required authority class)_

## Related

- [How do I set up a chart of accounts for my small business, and what accounts should it contain?](https://uppago.com/resources/how-do-i-set-up-a-chart-of-accounts-for-my-small-business-and-what-accounts)
- [Should I create separate accounts for each location, department or job, or use classes, tags or another tracking dimension instead?](https://uppago.com/resources/should-i-create-separate-accounts-for-each-location-department-or-job-or-use)

_Reference date 2026-09-07. Statements are quoted verbatim from their sources; scope and verification dates are shown on each._